Digital Transformation of SMEs: The Role of Entrepreneurial Persistence and Market Sensing Dynamic Capability

Abstract

New digital technologies, combined with the challenges faced by the pandemic, have prompted several organizations, including small and medium sized enterprises (SMEs), to innovate their business models. We extent this article by studying the impact of strategic leaders’ entrepreneurial persistence on digital transformation and business model innovation (BMI). We also examine the role of market-sensing dynamic capability in these relationships. To test our hypotheses, we use survey data from 229 owners/CEOs and senior managers of SMEs based in United Arab Emirates. The results show that entrepreneurial persistence positively influences the adoption of digital technologies and BMI. Moreover, the adoption of digital technologies has a positive effect on BMI and mediates the direct effects of entrepreneurial persistence on BMI. The mediating influence is positively moderated by market sensing dynamic capability.