How does digital transformation affect sustainable innovation performance? The pivotal roles of digital technology‐business alignment and environmental uncertainty

Abstract

AbstractDespite the importance of digital transformation in improving sustainable innovation performance, the mechanisms and boundary conditions through which digital transformation affects sustainable innovation performance is unclear. Using the lens of information technology‐enabled organizational capabilities, this study develops a moderated mediation model based on new economic growth theory and information asymmetry theory to examine the impact of digital transformation on sustainable innovation performance. Using a sample of Chinese agriculture firms, our findings reveal that digital transformation positively affects sustainable innovation performance through digital technology‐business alignment, and this indirect effect is stronger when environmental uncertainty is lower. Moreover, environmental uncertainty negatively moderates the relationship between digital transformation and digital technology‐business alignment. Our theoretical explanations and empirical evidence provide insights into how digital transformation initiatives can be leveraged to improve sustainable innovation performance, thus making an important contribution to the related literature.