Organizational readiness for digital financial innovation and financial resilience

Matloub Hussain and Avraam Papastathopoulos

International Journal of Production Economics, 2022, vol. 243, issue C

Abstract: The use of digital financial innovations (DFIs) in firms is widespread for supply or demand reasons. Successful realization of DFIs requires a digital transformation of the organizations. To date, there is hardly any study that discusses the organizational or strategic antecedents of DFIs in organizations. This study uses the organizational readiness and strategic alignment theories to understand how various dimensions of organizational readiness (change valence, change efficacy, and contextual factors) influence DFIs. The study also informs about the moderation effect of digital technology – business strategy alignment on the relationship between organizational readiness and DFIs. We find that the organization's change efficacy (comprising of resource readiness, IT readiness, and cognitive readiness) and contextual factors (comprising of culture readiness, strategic readiness, and partnership readiness) positively influence DFIs. However, no support is found for the moderation effect of digital technology – business strategy. We also find that DFIs positively impact the firms' financial performance and resilience (robustness and adaptability). The results are informative for practitioners and theoreticians. For practitioners, the study informs that realizing DFIs in organizations requires reconfigurability and flexibility of resources, IT, strategy, collaborations, and organization culture. Moreover, DFIs offer financial resilience to the firms to absorb financial shocks. For theoreticians, one crucial finding is that in a developing economy context, digital technology – business strategy alignment does not play a moderation role in realizing DFIs, which may not be the case in the developed economies and merits further research.

Keywords: Financial innovation; Digital finance; Financial resilience; Organizational readiness (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (24)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:proeco:v:243:y:2022:i:c:s0925527321003029

DOI: 10.1016/j.ijpe.2021.108326

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