The effect of digital transformation and innovation on SMEs’ performance in times of COVID-19

  • 607 Views
  • 118 Downloads

Creative Commons License
This work is licensed under a Creative Commons Attribution 4.0 International License

This study examines the impact of digital capabilities and digital orientation on the digital transformation and digital innovation of small and medium enterprises (SMEs) during the COVID-19 pandemic. In addition, this study assesses how the role of digital transformation and digital innovation mediates the relationship between digital capabilities, digital orientation, and SME performance during the COVID-19 pandemic. Using a sample of 247 SMEs managers, data were analyzed using the structural equation modeling with a partial least square approach. The findings demonstrate the significant and positive influence of digital capability and orientation on SMEs’ digital transformation and innovation during the pandemic. Additionally, the study confirms that digital transformation and innovation positively affect SMEs’ performance during the pandemic. Furthermore, the study reveals that digital transformation and innovation mediate the relationship between digital orientation and capability on SMEs’ performance during the pandemic. However, digital innovation was not found to significantly mediate the link between digital capability and SMEs’ performance.

view full abstract hide full abstract
    • Figure 1. Structural equation model
    • Table 1. Measurement items
    • Table 2. Sample demographics
    • Table 3. Validity and reliability result
    • Table 4. R-square
    • Table 5. Description of path coefficients
    • Table 6. Summary of mediation effects
    • Conceptualization
      Surahman, Rizky Yudaruddin
    • Funding acquisition
      Surahman, Rizky Yudaruddin
    • Methodology
      Surahman, Himanshu Shee, Rizky Yudaruddin
    • Software
      Surahman, Himanshu Shee, Rizky Yudaruddin
    • Validation
      Surahman, Himanshu Shee
    • Writing – review & editing
      Surahman, Himanshu Shee, Rizky Yudaruddin
    • Investigation
      Himanshu Shee, Zhikry Fitrian, Ari Sasmoko Adi, Rizky Yudaruddin
    • Supervision
      Himanshu Shee, Zhikry Fitrian, Ari Sasmoko Adi
    • Formal Analysis
      Zhikry Fitrian, Ari Sasmoko Adi
    • Project administration
      Zhikry Fitrian, Ari Sasmoko Adi
    • Visualization
      Zhikry Fitrian, Ari Sasmoko Adi
    • Writing – original draft
      Zhikry Fitrian, Ari Sasmoko Adi
    • Data curation
      Rizky Yudaruddin
    • Resources
      Rizky Yudaruddin