Digital transformation anxiety: absorptive capacity, dynamic capability, and digital innovation performance

Purpose: This study proposes the novel construct of digital transformation anxiety and investigates its effect, which is mediated by absorptive capacity and dynamic capability, on digital innovation performance. Design/methodology/approach: This study conducted a questionnaire survey among Taiwanese manufacturing and service companies to verify the research framework. A total of 130 valid responses were collected and analyzed using partial least squares structural equation modeling (PLS-SEM) and bootstrapping to test direct and mediation effects, respectively. Findings: Digital transformation anxiety negatively affects absorptive capacity and dynamic capability, whereas absorptive capacity and dynamic capability positively affect digital innovation performance. Dynamic capability more strongly mediates the association between digital transformation anxiety and digital innovation performance than absorptive capacity. Additionally, digital transformation anxiety does not negatively affect digital innovation performance. Finally, manufacturing companies had significantly higher levels of digital transformation anxiety than service companies. Research limitations/implications: This study proposes the novel construct of digital transformation anxiety to address a gap in the literature. Digital transformation anxiety leads companies to adopt unnecessarily conservative practices, preventing them from flexibly responding to technological advances. This insight highlights the negative effect of such anxiety on absorptive capacity and dynamic capability, extending the application of path dependency theory to companies. The findings underscore the value of enhancing dynamic capability and reallocating resources to foster digital innovation. The study identified and explored the concept of digital transformation anxiety and extended the perspective of dynamic capability to include digital transformation and digital innovation. Practical implications: The current findings indicate that digital transformation anxiety does not substantially affect digital innovation performance in Taiwanese companies. Consequently, Taiwanese companies should focus on developing their absorptive capacity and dynamic capability to enhance digital innovation. Originality/value: The study proposes the novel construct of digital transformation anxiety and explores its effect on business units. It presents a pioneering framework derived from path dependence theory and the perspective of dynamic capability.