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Strategic Adoption of Artificial Intelligence and Firm Performance: The Mediating Role of Strategic Agility in Emerging Economies

Author

Listed:
  • Mahmood Fawzi Hameed

Abstract

Purpose: This study examines the relationship between the strategic adoption of artificial intelligence (AI) and firm performance, with strategic agility serving as a mediating mechanism, in the context of emerging economies. Design/Methodology/Approach: Drawing on data collected from 220 firms operating across multiple sectors, the study employs a quantitative research design and analyzes the proposed model using partial least squares structural equation modeling (PLS-SEM). Findings: The results reveal that strategic AI adoption has a significant positive effect on firm performance and strategic agility. Furthermore, strategic agility is found to positively influence firm performance and partially mediate the relationship between strategic AI adoption and firm performance. These findings suggest that AI creates value not only through direct performance improvements but also by enhancing firms’ strategic responsiveness and adaptability. Practical Implications: The study contributes to strategic management and digital transformation literature by clarifying the mechanism through which AI-driven strategies influence performance, particularly in emerging economies. Originality/Value: The findings also provide practical insights for managers seeking to leverage AI strategically to achieve sustainable competitive advantage in dynamic and uncertain environments.

Suggested Citation

  • Mahmood Fawzi Hameed, 2026. "Strategic Adoption of Artificial Intelligence and Firm Performance: The Mediating Role of Strategic Agility in Emerging Economies," International Journal of Economics & Business Administration (IJEBA), International Journal of Economics & Business Administration (IJEBA), vol. 0(1), pages 186-199.
    • Handle: RePEc:ers:ijebaa:v:xiv:y:2026:i:1:p:186-199
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    References listed on IDEAS

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    1. Diego Norena-Chavez & Eleftherios I. Thalassinos, 2022. "Transactional Leadership and Innovative Behavior as Factors Explaining Emotional Intelligence: A Mediating Effect," JRFM, MDPI, vol. 15(12), pages 1-9, November.
    2. Diego Norena-Chavez & Eleftherios Thalassinos, 2022. "The Mediation Effect of Entrepreneurial Self-Efficacy in the Relationship Between Entrepreneurial Passion and Leadership Styles," Contemporary Studies in Economic and Financial Analysis, in: The New Digital Era: Other Emerging Risks and Opportunities, volume 109, pages 99-125, Emerald Group Publishing Limited.
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    Keywords

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    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business

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