Navigating digital waves: unveiling entrepreneurial leadership toward digital innovation and sustainable performance in the Chinese IT industry

Purpose The rapid evolution of digital innovation has significantly revolutionized the business landscape for entrepreneurs. Embracing digital innovation is crucial for all stakeholders to achieve sustainable development goals (SDGs) and promote sustainability. However, there is little understanding of how entrepreneurial leadership in developing nations has proactively responded to the challenge of digital innovation. Based on Drucker’s productivity theory, this study examines the relationship between entrepreneurial leadership (EL), digital orientation (DO) and digital capability (DC) as predictors of digital innovation (DI). The proposed model aims to establish the causal connections between variables and elucidate the complex interplay between digital innovation and the resulting outcome of sustainable performance (SP). Design/methodology/approach Two research studies were carried out in the Chinese IT industry to assess the efficacy of the theoretical framework among IT workers. Study 1 utilized a three-week, two-week time-lagged design ( N = 299), while Study 2 used a two-week, four-week survey design ( N = 341). The study used Smart-PLS 4.0 for data analysis. Findings The results showed that entrepreneurial leadership significantly impacts employee digital orientation and digital capabilities, fostering digital innovation. Moreover, digital innovation has a significant impact on sustainable performance. Originality/value The study’s findings allow authors to contribute to the existing scholarship on employee digital orientation, digital capabilities, digital innovation and sustainable performance in an emerging economy.