Digital Transformation and Sustainable Business Performance: An Empirical Analysis of Innovation, Leadership, and Policy Integration in Emerging Economies

Abstract

Digital transformation is now a major catalyst of organizational competitiveness and sustainability more so in the emerging economies. Nevertheless, the processes in which digital transformation can boost sustainable business performance are only partially studied. This research paper explores how digital transformation can affect sustainable business performance with focus on the functions of innovation, leadership and policy integration. On the basis of the Resource-Based View, the Dynamic Capabilities Theory and the Institutional Theory, a conceptual framework is created and tested empirically on the basis of the data gathered among the firms operating in emerging economies. The quantitative research design is taken and Structural Equation Modeling (SEM) is used to check relationships between the constructs. The findings indicate that digital transformation has a positive impact on sustainable business performance. Innovation is determined to mediate this relationship, in part, meaning that it is important in transforming digital capabilities into long-term results. Also, the integrations of leadership and policy are important moderating forces, which favor the success of any digital transformation efforts. This research has value since it provides a holistic empirical model between digital transformation and sustainability at an organizational and policy level. Findings are practical to guide managers and policymakers who seek to ensure digital strategies are in line with sustainable development goals in emerging markets.