The Impact of Digital Transformation on the Operational Performance of Small and Medium-sized Enterprises: The Mediating Effect of Organizational Agility

Mingyang Miranda Li; Xinqi Chen; Le Yu

doi:10.54691/p3540p23

Authors

Mingyang Miranda Li AmazingX Academy, Shenzhen, China
Xinqi Chen AmazingX Academy, Shenzhen, China
Le Yu AmazingX Academy, Shenzhen, China

DOI:

https://doi.org/10.54691/p3540p23

Keywords:

Digital transformation, organizational agility, operational performance, small and medium-sized enterprises, mediating effect.

Abstract

For small and medium-sized enterprises, digital transformation now occupies a central place on the strategic agenda, yet whether and how it translates into operational gains is still supported by fragmented empirical evidence. By drawing on the dynamic capability perspective, we examine the effect of digital transformation on the operational performance of small and medium-sized enterprises and test whether organizational agility serves as the transmission mechanism. Survey data from 412 small and medium-sized manufacturing and service firms are studied using hierarchical regression and bootstrap mediation testing. A significant positive effect of digital transformation on operational performance emerges from the results, and digital transformation is found to strengthen organizational agility considerably. Organizational agility partially mediates the link between the two constructs, and it accounts for 45.1 percent of the total effect. The indirect path turns out to be stronger among smaller firms and among manufacturing firms in the heterogeneity analysis, whereas the direct path is more pronounced among medium-sized firms. Stability of these findings is found to be robust when considering an alternative outcome measure and a lagged specification.

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