Digital Technologies and Business Model Innovation in Turbulent Markets: Unlocking the Power of Agility and Absorptive Capacity

Hatem Abuseta (), Kolawole Iyiola and Hasan Yousef Aljuhmani
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Hatem Abuseta: Department of Business Administration, Institute of Graduate Research and Studies, University of Mediterranean Karpasia, Via Mersin 10, Lefkosa 33010, Turkey
Kolawole Iyiola: Department of Business Administration, Institute of Graduate Research and Studies, University of Mediterranean Karpasia, Via Mersin 10, Lefkosa 33010, Turkey
Hasan Yousef Aljuhmani: Department of Business Administration, Institute of Graduate Research and Studies, University of Mediterranean Karpasia, Via Mersin 10, Lefkosa 33010, Turkey

Sustainability, 2025, vol. 17, issue 12, 1-28

Abstract: This study explores how digital technologies (DTs) drive business model innovation (BMI) in the traditional manufacturing sector of an emerging economy, focusing on the mediating roles of firm agility (FA), absorptive capacity (AC), and the moderating role of market turbulence (MT). Drawing on organizational adaptation theory and the dynamic capability view, the study develops a conceptual model tested through a survey of 479 senior managers from small and medium-sized manufacturing enterprises (SMEs) in three major industrial cities in Turkey. The results confirm that DTs have a significant positive effect on BMI, with both FA and AC partially mediating this relationship. Additionally, MT strengthens the impact of DTs on FA but does not significantly moderate its effect on AC or BMI. These findings reveal that the effectiveness of digital transformation depends not only on technological investments but also on internal organizational capabilities and external environmental conditions. The study contributes to the digital transformation literature by offering empirical evidence from an underexplored emerging market context and by demonstrating the conditional pathways through which DTs influence innovation. Practical implications highlight the importance of enhancing agility and knowledge integration to translate digital investments into strategic value under turbulent market conditions.

Keywords: digital technologies; business model innovation; firm agility; absorptive capacity; market turbulence; dynamic capabilities; manufacturing SMEs (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2025
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