Digital transformation and sustainable business growth: The mediating role of innovation, agility, and digital resilience
TL;DR
This study is among the first to integrate innovation, agility, and digital resilience into a unified parallel mediation framework linking digital transformation to sustainable business growth, empirically validated in a multi-country Middle Eastern context.
Abstract
Purpose
This study examines how digital transformation (DT) influences sustainable business growth (SBG) in Middle Eastern firms, proposing and empirically testing a parallel mediation model in which innovation, organizational agility, and digital resilience serve as transmitting organizational capabilities. Grounded in the resource-based view and dynamic capabilities theory, the study addresses the theoretical gap arising from the fragmented treatment of digitalization, innovation, agility, and resilience as isolated constructs, and the empirical gap stemming from the near-exclusive focus of existing research on Western and manufacturing-dominated contexts. METHODOLOGY: A structured online questionnaire was administered between May and August 2025 to managers and senior professionals in firms actively engaged in digital transformation initiatives across five Middle Eastern economies: Lebanon, Jordan, the United Arab Emirates, the Kingdom of Saudi Arabia, and Kuwait. Of 410 distributed invitations, 339 responses were received, and following the removal of 15 duplicate entries and incomplete responses, a final sample of 324 valid responses was retained. Data was analyzed using partial least squares structural equation modeling (PLS-SEM) via SmartPLS 4.0.9.6, with bootstrapping based on 5,000 resamples to assess mediation effects.
Findings
Digital transformation exerts significant positive effects on innovation (β = 0.666), agility (β = 0.613), and digital resilience (β = 0.530), as well as a direct effect on sustainable business growth (β = 0.191). Agility (β = 0.305) and digital resilience (β = 0.209) significantly mediate the DT–SBG relationship, whereas the mediation path through innovation is non-significant (β = 0.044). The total indirect effect amounts to 0.327, yielding a Variance Accounted For of 63.1%, confirming partial mediation. IMPLICATIONS: Theoretically, the findings extend dynamic capabilities theory by empirically demonstrating that digital transformation functions as an enabling infrastructure rather than a direct performance mechanism, with agility and resilience constituting the primary conversion pathways to sustainable growth. Practically, the results advise managers and policymakers on digitally transforming economies to prioritize the development of adaptive responsiveness and resilience-oriented governance alongside technological investment, as technology adoption alone does not guarantee sustainability outcomes. ORIGINALITY & VALUE: This study is among the first to integrate innovation, agility, and digital resilience into a unified parallel mediation framework linking digital transformation to sustainable business growth, empirically validated in a multi-country Middle Eastern context, a setting underrepresented in the extant digital transformation literature.