A systematic literature review of digital transformation and SME performance in developing economies

Digital transformation is important for small and medium-sized enterprises (SMEs) in developing economies, yet evidence on its relationship with performance remains fragmented. This review critically synthesizes Scopus-indexed empirical research published from 2015 to 2025. Following PRISMA 2020, 30 studies were selected through structured searching, screening, and eligibility assessment. Methodological quality was formally assessed for 29 studies using the Mixed Methods Appraisal Tool, version 2018, while one Grey-DANP expert study outside MMAT categories was evaluated narratively. Digital transformation was operationalized as broad organizational transformation, digitalization, or maturity in 19 studies, named technologies or technology bundles in six, and capability or configurational approaches in five. Performance outcomes included financial performance, innovation, productivity, sustainability, resilience, marketing, growth, and competitiveness. Only six studies reported a direct positive relationship without modeled mediation or moderation; 10 combined direct relationships with mediating, moderating, interaction, or contextual mechanisms; six were predominantly indirect or mechanism-based; seven focused mainly on adoption, maturity, readiness, or transformation processes; and one reported a conditional resilience relationship. The evidence therefore does not support a uniform direct effect. Value realization depends on innovation, business-process improvement, information disclosure, market expansion, capability reconfiguration, skills, infrastructure, finance or transformation cost, and market conditions, while formal institutional support remains less directly tested. Evidence is concentrated in Asian settings and cross-sectional survey/SEM designs, limiting causal and regional inference. The review develops a context-sensitive framework separating adoption antecedents, digital-transformation dimensions, mediating mechanisms, boundary conditions, and financial and non-financial consequences, and identifies priorities for longitudinal, comparative, mixed-method, and theory-driven research.