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Digital technology adoption can be beneficial for sustainable development of firms. This study seeks to illuminate how it works, based on the contingent affordance actualization theory that emphasizes both action potential and achievement context of technology. Specifically, it considers supply chain innovation as the underexplored mechanism and environmental munificence as the context factor. With the matched multisource data of 157 human resources service firms in China, the empirical findings show that supply chain innovation mediates the relationship between digital technology adoption and sustainable performance. Additionally, environmental munificence, the extent of the resources available in an environment, weakens this indirect relationship. By demonstrating these relations, this study provides firms with insights that allow them to utilize both the functional and coordinated action potentials of digital technology to conduct supply chain innovation, which in turn enhances sustainable performance. During this process, firms are further advised to be watchful to cope with organizational inertia when environmental munificence is high.
Li et al. (Sat,) studied this question.