Digital Transformation and SME Innovation: A Comprehensive Analysis of Mediating and Moderating Effects

Muhammad Bilal (), Zhao Xicang (), Wu Jiying (), Jan Muhammad Sohu (), Sadaf Akhtar () and Muhammad Iatzaz Ul Hassan ()
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Muhammad Bilal: Jiangsu University
Zhao Xicang: Jiangsu University
Wu Jiying: Jiangsu University
Jan Muhammad Sohu: Jiangsu University
Sadaf Akhtar: Jiangsu University
Muhammad Iatzaz Ul Hassan: Jiangsu University

Journal of the Knowledge Economy, 2025, vol. 16, issue 1, No 41, 1153-1182

Abstract: Abstract In the modern age of the digital economy, digital transformation has emerged as an innovative strategy for businesses to obtain a competitive edge in the context of highly saturated and dynamic market competition. Organizations across various industries have experienced or are presently experiencing digital transformation. The present research examines the effects of technological, organizational, and environmental factors on digital transformation and SMEs’ innovative performance in developing economies. This study used a survey to collect the data through a self-administrative survey. PLS-SEM was used for path analysis on 575 responses from managers and directors of SMEs. The findings indicate that technological, environmental, and organizational factors have significantly and positively influenced digital transformation in SMEs and their innovative performance. Employee skills positively moderate the relationship between digital transformation and innovative performance. This study also offers practitioners valuable insights regarding enterprises’ digital transformation.

Keywords: Digital Transformation; Business strategy; Key Antecedents; Innovative performance; Small and medium enterprises (search for similar items in EconPapers)
Date: 2025
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DOI: 10.1007/s13132-024-02054-0

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