DIGITAL TRANSFORMATION, ENTERPRISE DYNAMIC CAPABILITIES, AND “BUSINESS MODEL INNOVATION

Abstract

The concepts of digital transformation and dynamic capabilities have gained significant attention in contemporary times. Chinese enterprises must promptly utilize dynamic capabilities to acquire external resources, knowledge, and skills to enhance their internal capabilities and achieve innovation. This study constructs a theoretical model to examine the influence of digital transformation on business innovation, based on the dynamic capabilities theory. It also explores the mediating role of dynamic capabilities in the relationship between digital transformation and business model innovation. The research model was empirically tested using SEM structural equations on 400 valid enterprise questionnaires. The results indicate that the digital transformation of enterprises has a positive effect on’’ business model innovation’’ and enterprise dynamic capabilities. Furthermore, enterprise dynamic capabilities have a positive impact on “business model innovation.” Moreover, digital transformation has a positive effect on ‘’business model innovation’’ by mediating enterprise dynamic capabilities. At the strategic level, enterprises should prioritize digital awareness, quickly adapt to changes in both internal and external markets, and adjust their business models by emphasizing the optimization of dynamic capabilities.