Digital transformation and firm performance in innovative SMEs: The mediating role of business model innovation

• Published in: Technovation Vol. 134; p. 103027
• Main Authors: Merín-Rodrigáñez, Joan, Dasí, Àngels, Alegre, Joaquín
• Format: Journal Article
• Language: English
• Published: Elsevier Ltd 01.06.2024
• Subjects: Business model innovation; Digital transformation; Firm performance; Innovative SMEs; Business model innovation; Firm performance; Digital transformation; Innovative SMEs
• ISSN: 0166-4972; 1879-2383
• DOI: 10.1016/j.technovation.2024.103027

This study investigates the consequences of digital transformation (DT) over performance in the case of innovative Small and Medium-sized Enterprises (SMEs). SMEs represent a heterogeneous kind of company in terms of capabilities. By focusing on their innovative character as a boundary condition, we increase our understanding of this relationship. We further research the mediating role of business model innovation (BMI) in the relationship between DT and performance. A sample of 434 innovative Spanish SMEs is used to test the research model through Partial Least Squares Structural Equation Modelling (PLS-SEM). We find that BMI partially mediates the positive relationship between DT and performance. This finding extends our understanding of BMI as an alignment tool and a blueprint for innovative SMEs channeling their investments in DT towards the improvement of performance. Finally, we put forward managerial implications and propose future avenues of research. •We focus on the innovative character of SMEs as a boundary condition to study the outcomes of digital transformation.•Digital transformation (DT) and business model innovation (BMI) are key drivers for innovative SME performance.•DT has a positive influence on BMI.•BMI partially mediates the relationship between DT and innovative SME performance.