Digital transformation capability and sustainable innovation: Organizational learning capability, green innovation culture, and market dynamism

This study examines how digital transformation capability fosters sustainable innovation in Vietnamese SMEs through mechanisms based on capabilities. It focuses on the mediating roles of organizational learning capability and green innovation culture, and the moderating effect of market dynamism. Data from 300 manufacturing and service SMEs were analyzed using a two-stage PLS-SEM approach. The findings indicate that digital transformation capability significantly enhances both organizational learning capability and a green innovation culture, which, in turn, drives sustainable innovation. These mediators operate in complementary ways, explaining a substantial portion of the overall effect. In addition, market dynamism strengthens the relationships between these capabilities and sustainable innovation, highlighting their synergistic effects in dynamic environments. This study contributes by conceptualizing digital transformation capability as a higher-order construct, identifying dual mediation mechanisms, and emphasizing market dynamism as a key boundary condition, with important implications for theory and practice.