From Digital Entrepreneurial Orientation to Sustainable Competitive Advantage: The Sequential Roles of Digital Capability and Business Model Innovation

Abstract

Digital transformation is reshaping entrepreneurial firms by enabling organizations to integrate emerging technologies, access market intelligence, redesign business processes, and respond rapidly to changing competitive conditions. However, the mechanisms through which digital transformation and technological investment translate into disruptive innovation remain insufficiently understood. Building on the dynamic capabilities perspective, this study examines how digital transformation and technological investment contribute to disruptive innovation through digital innovation capability and investigates whether inter-organizational collaboration strengthens this transformation–innovation process. Drawing on data from entrepreneurial firms, the study develops an integrated framework in which digital transformation and technological investment enhance firms’ digital innovation capability, which subsequently facilitates disruptive innovation. In addition, inter-organizational collaboration is proposed as a boundary condition that strengthens the effect of digital innovation capability on disruptive innovation by enabling firms to access complementary knowledge, resources, expertise, and market intelligence. The study contributes to the disruptive innovation literature by moving beyond direct-effect explanations and clarifying the capability-building mechanism through which digital transformation and technology-related investments generate disruptive outcomes. The findings are expected to provide important implications for entrepreneurial firms seeking to convert digital resources and collaborative relationships into market disrupting innovations.