Figure 2
The diagram presents a conceptual framework of digital innovation adoption and sustainable competitive advantage in SMEs, organized into strategic, operational, and integrated pathways. The strategic pathway shows digital innovation adoption leading to organizational capability, strategic outcomes, and competitive advantage, with agile mindset and visionary leadership moderating the relationship between strategic outcomes and competitive advantage. The operational pathway shows digital technology adoption influencing supply chain optimization, labour productivity, process management, reduced work exhaustion, and intellectual capital, which in turn contribute to improved operational performance. Employee training moderates the effects of technology adoption on these five outcomes, while firm size moderates their effects on operational performance. The integrated pathway links improved operational performance and competitive advantage to open innovation, knowledge sharing, dynamic capabilities, and ultimately sustainable competitive advantage. Institutional environment moderates the relationship between knowledge sharing and dynamic capabilities, while digital climate, paradoxical leadership, and corporate social responsibility moderate the relationship between dynamic capabilities and sustainable competitive advantage. Solid arrows indicate direct effects and dashed arrows indicate moderating effects.Conceptual framework. Source: Authors’ own work