Digital Transformation and Performance of Indian MSMEs: The Mediating Role of Innovation Capability and the Moderating Role of Digital Leadership

Abstract

         In India, micro, small, and medium-sized enterprises (MSMEs) are crucial to the creation of jobs, entrepreneurship, regional development, and economic expansion. However, MSMEs now face both opportunities and problems as a result of growing digitalization, especially when it comes to organizational capacities, innovation, and technology adoption. With a focus on the mediating function of innovation capability and the moderating function of digital leadership, this study investigates the connection between MSME performance and digital transformation. According to the survey, MSMEs can create new goods, services, procedures, and business models thanks to digital transformation, which enhances organizational performance. At the same time, organizational leaders' capacity to develop and successfully execute digital strategies may be a determining factor in the success of digital transformation. Owners, managers, and senior staff of Indian MSMEs are given a structured questionnaire as part of a suggested quantitative research design. Descriptive statistics, validity and reliability tests, correlation analysis, and structural equation modelling (SEM) can all be used to analyse   data. The suggested relationships can then be investigated using mediation and moderation   analyses. By combining technological transformation, innovation capability, and digital leadership into a single model, the suggested framework adds to the literature on MSMEs and digital transformation. For MSME managers, legislators, and other stakeholders looking to enhance organizational performance through successful digital transformation, the study is anticipated to have implications.