Digital Transformation and Organizational Innovation Performance: The Mediating Role of Organizational Agility and the Moderating Role of Top Management Support

Abstract

Digital transformation has moved from a peripheral technology initiative to a condition of organizational survival, yet its translation into innovation performance remains conditional on organizational and managerial factors that are not fully understood, particularly in emerging markets such as Egypt. This study develops and tests an integrated model in which Digital Transformation affects Organizational Innovation Performance both directly and indirectly through Organizational Agility, with Top Management Support proposed to moderate the relationship between Digital Transformation and Organizational Agility. Drawing on Dynamic Capabilities Theory, Diffusion of Innovation Theory, and the Resource-Based View, data were collected from 453 executive managers, chief information officers, information technology managers, and middle managers in medium and large Egyptian firms undergoing digital transformation and analyzed using partial least squares structural equation modeling. Results show that Digital Transformation significantly strengthens Organizational Agility, and that both Organizational Agility and Digital Transformation significantly improve Organizational Innovation Performance. Organizational Agility partially mediates the effect of Digital Transformation on innovation performance in a complementary pattern, accounting for over a third of the total effect. However, Top Management Support does not significantly moderate the Digital Transformation to Organizational Agility relationship. These findings suggest that agility functions as one of several channels converting digital capability into innovation outcomes, and that managerial support may operate as a direct enabling condition rather than a boundary condition in this context.