IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v17y2025i12p5296-d1674409.html
   My bibliography  Save this article

Digital Technologies and Business Model Innovation in Turbulent Markets: Unlocking the Power of Agility and Absorptive Capacity

Author

Listed:
  • Hatem Abuseta

    (Department of Business Administration, Institute of Graduate Research and Studies, University of Mediterranean Karpasia, Via Mersin 10, Lefkosa 33010, Turkey)

  • Kolawole Iyiola

    (Department of Business Administration, Institute of Graduate Research and Studies, University of Mediterranean Karpasia, Via Mersin 10, Lefkosa 33010, Turkey)

  • Hasan Yousef Aljuhmani

    (Department of Business Administration, Institute of Graduate Research and Studies, University of Mediterranean Karpasia, Via Mersin 10, Lefkosa 33010, Turkey)

Abstract

This study explores how digital technologies (DTs) drive business model innovation (BMI) in the traditional manufacturing sector of an emerging economy, focusing on the mediating roles of firm agility (FA), absorptive capacity (AC), and the moderating role of market turbulence (MT). Drawing on organizational adaptation theory and the dynamic capability view, the study develops a conceptual model tested through a survey of 479 senior managers from small and medium-sized manufacturing enterprises (SMEs) in three major industrial cities in Turkey. The results confirm that DTs have a significant positive effect on BMI, with both FA and AC partially mediating this relationship. Additionally, MT strengthens the impact of DTs on FA but does not significantly moderate its effect on AC or BMI. These findings reveal that the effectiveness of digital transformation depends not only on technological investments but also on internal organizational capabilities and external environmental conditions. The study contributes to the digital transformation literature by offering empirical evidence from an underexplored emerging market context and by demonstrating the conditional pathways through which DTs influence innovation. Practical implications highlight the importance of enhancing agility and knowledge integration to translate digital investments into strategic value under turbulent market conditions.

Suggested Citation

  • Hatem Abuseta & Kolawole Iyiola & Hasan Yousef Aljuhmani, 2025. "Digital Technologies and Business Model Innovation in Turbulent Markets: Unlocking the Power of Agility and Absorptive Capacity," Sustainability, MDPI, vol. 17(12), pages 1-28, June.
    • Handle: RePEc:gam:jsusta:v:17:y:2025:i:12:p:5296-:d:1674409
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/17/12/5296/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/17/12/5296/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Giovana Sordi Schiavi & Ariel Behr, 2018. "Emerging technologies and new business models: a review on disruptive business models," Innovation & Management Review, Emerald Group Publishing Limited, vol. 15(4), pages 338-355, October.
    2. Dal Mas, Francesca & Massaro, Maurizio & Rippa, Pierluigi & Secundo, Giustina, 2023. "The challenges of digital transformation in healthcare: An interdisciplinary literature review, framework, and future research agenda," Technovation, Elsevier, vol. 123(C).
    3. Armstrong, J. Scott & Overton, Terry S., 1977. "Estimating Nonresponse Bias in Mail Surveys," MPRA Paper 81694, University Library of Munich, Germany.
    4. Safinaz H. Abourokbah & Reem M. Mashat & Mohammad Asif Salam, 2023. "Role of Absorptive Capacity, Digital Capability, Agility, and Resilience in Supply Chain Innovation Performance," Sustainability, MDPI, vol. 15(4), pages 1-25, February.
    5. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    6. Bouwman, Harry & Nikou, Shahrokh & de Reuver, Mark, 2019. "Digitalization, business models, and SMEs: How do business model innovation practices improve performance of digitalizing SMEs?," Telecommunications Policy, Elsevier, vol. 43(9).
    7. Larbi-Siaw, Otu & Xuhua, Hu & Owusu, Ebenezer & Owusu-Agyeman, Abigail & Fulgence, Brou Ettien & Frimpong, Samuel Akwasi, 2022. "Eco-innovation, sustainable business performance and market turbulence moderation in emerging economies," Technology in Society, Elsevier, vol. 68(C).
    8. Kevin Zheng Zhou & Fang Wu, 2010. "Technological capability, strategic flexibility, and product innovation," Strategic Management Journal, Wiley Blackwell, vol. 31(5), pages 547-561, May.
    9. Yuliya Snihur & Christoph Zott & Raphael (Raffi) Amit, 2021. "Managing the Value Appropriation Dilemma in Business Model Innovation," Strategy Science, INFORMS, vol. 6(1), pages 22-38, March.
    10. Suliman Ben Ghrbeia & Ahmad Alzubi, 2024. "Building Micro-Foundations for Digital Transformation: A Moderated Mediation Model of the Interplay between Digital Literacy and Digital Transformation," Sustainability, MDPI, vol. 16(9), pages 1-28, April.
    11. Latifi, Mohammad-Ali & Nikou, Shahrokh & Bouwman, Harry, 2021. "Business model innovation and firm performance: Exploring causal mechanisms in SMEs," Technovation, Elsevier, vol. 107(C).
    12. Martínez-Caro, Eva & Cegarra-Navarro, Juan Gabriel & Alfonso-Ruiz, Francisco Javier, 2020. "Digital technologies and firm performance: The role of digital organisational culture," Technological Forecasting and Social Change, Elsevier, vol. 154(C).
    13. Elhassan Enbaia & Ahmad Alzubi & Kolawole Iyiola & Hasan Yousef Aljuhmani, 2024. "The Interplay Between Environmental Ethics and Sustainable Performance: Does Organizational Green Culture and Green Innovation Really Matter?," Sustainability, MDPI, vol. 16(23), pages 1-24, November.
    14. Cheng, Cong & Wang, Limin, 2022. "How companies configure digital innovation attributes for business model innovation? A configurational view," Technovation, Elsevier, vol. 112(C).
    15. Ali Mamash & Kolawole Iyiola & Hasan Yousef Aljuhmani, 2025. "The Role of Circular Economy Entrepreneurship, Cleaner Production, and Green Government Subsidy for Achieving Sustainability Goals in Business Performance," Sustainability, MDPI, vol. 17(9), pages 1-26, April.
    16. Landoni, Paolo & Dell’era, Claudio & Frattini, Federico & Messeni Petruzzelli, Antonio & Verganti, Roberto & Manelli, Luca, 2020. "Business model innovation in cultural and creative industries: Insights from three leading mobile gaming firms," Technovation, Elsevier, vol. 92.
    17. David J. Teece, 2007. "Explicating dynamic capabilities: the nature and microfoundations of (sustainable) enterprise performance," Strategic Management Journal, Wiley Blackwell, vol. 28(13), pages 1319-1350, December.
    18. Daniel F. Jennings & Samuel L. Seaman, 1994. "High and low levels of organizational adaptation: An empirical analysis of strategy, structure, and performance," Strategic Management Journal, Wiley Blackwell, vol. 15(6), pages 459-475, July.
    19. Gillani, Fatima & Chatha, Kamran Ali & Sadiq Jajja, Muhammad Shakeel & Farooq, Sami, 2020. "Implementation of digital manufacturing technologies: Antecedents and consequences," International Journal of Production Economics, Elsevier, vol. 229(C).
    20. Luo, Xingwu & Cao, Dongmei & Tjahjono, Benny & Adegbile, Abiodun, 2022. "Business model innovation themes of emerging market enterprises: Evidence in China," Journal of Business Research, Elsevier, vol. 139(C), pages 1619-1630.
    21. Dagnachew L. Senbeto & Alice H. Y. Hon, 2020. "Market turbulence and service innovation in hospitality: examining the underlying mechanisms of employee and organizational resilience," The Service Industries Journal, Taylor & Francis Journals, vol. 40(15-16), pages 1119-1139, December.
    22. Nambisan, Satish & Wright, Mike & Feldman, Maryann, 2019. "The digital transformation of innovation and entrepreneurship: Progress, challenges and key themes," Research Policy, Elsevier, vol. 48(8), pages 1-1.
    23. Kinkel, Steffen & Baumgartner, Marco & Cherubini, Enrica, 2022. "Prerequisites for the adoption of AI technologies in manufacturing – Evidence from a worldwide sample of manufacturing companies," Technovation, Elsevier, vol. 110(C).
    24. Vittori, Davide & Natalicchio, Angelo & Panniello, Umberto & Messeni Petruzzelli, Antonio & Cupertino, Francesco, 2022. "Business Model Innovation between the embryonic and growth stages of industry lifecycle," Technovation, Elsevier, vol. 117(C).
    25. Codini, Anna Paola & Abbate, Tindara & Messeni Petruzzelli, Antonio, 2023. "Business Model Innovation and exaptation: A new way of innovating in SMEs," Technovation, Elsevier, vol. 119(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zaynab Asbeetah & Ahmad Alzubi & Amir Khadem & Kolawole Iyiola, 2025. "Harnessing Digital Transformation for Sustainable Performance: Exploring the Mediating Roles of Green Knowledge Acquisition and Innovation Performance Under Digital Transformational Leadership," Sustainability, MDPI, vol. 17(5), pages 1-32, March.
    2. Xiang, Guopeng & Peng, Mixiang & Tang, Fei & Liu, Yuan, 2024. "Unpacking the impact of entrepreneurial learning on business model innovation in internet startups: Mediating roles of digital capabilities," Technology in Society, Elsevier, vol. 77(C).
    3. Merín-Rodrigáñez, Joan & Alegre, Joaquín & Dasí, Àngels, 2025. "International entrepreneurship in innovative SMEs: Examining the connection between CEOs’ dynamic managerial capabilities, business model innovation and export performance," International Business Review, Elsevier, vol. 34(2).
    4. Changwei Pang & Qiong Wang, 2024. "How Digital Transformation Promotes Disruptive Innovation? Evidence from Chinese Entrepreneurial Firms," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(2), pages 7788-7818, June.
    5. Lin, Yini & Wu, Lei-Yu, 2014. "Exploring the role of dynamic capabilities in firm performance under the resource-based view framework," Journal of Business Research, Elsevier, vol. 67(3), pages 407-413.
    6. Sullivan, Yulia & Fosso Wamba, Samuel, 2024. "Artificial intelligence and adaptive response to market changes: A strategy to enhance firm performance and innovation," Journal of Business Research, Elsevier, vol. 174(C).
    7. Ali Kemal Çeli̇k & Tayfun Yildiz & Zafer Aykanat & Siamak Kazemzadeh, 2025. "Green Innovation Adoption in Turkish and Iranian SMEs: The Effect of Dynamic Capabilities and the Mediating Role of Absorptive Capacity," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 16(1), pages 1824-1859, March.
    8. Li, Xiaolin & Zhang, Mengjie & Li, Weiwen & Chen, Juanyi, 2025. "Looking for new possibilities in emerging industries: The impact of strategic sensing capability on high-tech startups’ product innovation," Journal of Business Research, Elsevier, vol. 189(C).
    9. Qaiyum, Sameer & Wang, Catherine L., 2018. "Understanding internal conditions driving ordinary and dynamic capabilities in Indian high-tech firms," Journal of Business Research, Elsevier, vol. 90(C), pages 206-214.
    10. Philipp Nitzsche & Bernd W. Wirtz & Vincent Göttel, 2016. "Innovation Success In The Context Of Inbound Open Innovation," International Journal of Innovation Management (ijim), World Scientific Publishing Co. Pte. Ltd., vol. 20(02), pages 1-38, February.
    11. Ritu Singh & Parikshit Charan & Manojit Chattopadhyay, 2019. "Dynamic capabilities and responsiveness: moderating effect of organization structures and environmental dynamism," DECISION: Official Journal of the Indian Institute of Management Calcutta, Springer;Indian Institute of Management Calcutta, vol. 46(4), pages 301-319, December.
    12. Ying Guo, 2023. "External Knowledge Acquisition and Green Innovation in Chinese Firms: Unveiling the Impact of Green Dynamic Capabilities," SAGE Open, , vol. 13(3), pages 21582440231, July.
    13. Talaei-Khoei, Amir & Yang, Alan T. & Masialeti, Masialeti, 2024. "How does incorporating ChatGPT within a firm reinforce agility-mediated performance? The moderating role of innovation infusion and firms’ ethical identity," Technovation, Elsevier, vol. 132(C).
    14. Merín-Rodrigáñez, Joan & Dasí, Àngels & Alegre, Joaquín, 2024. "Digital transformation and firm performance in innovative SMEs: The mediating role of business model innovation," Technovation, Elsevier, vol. 134(C).
    15. Kwangsoo Kim & Eun-Hwa Seo & Choo Yeon Kim, 2025. "The Relationships Between Environmental Dynamism, Absorptive Capacity, Organizational Ambidexterity, and Innovation Performance from the Dynamic Capabilities Perspective," Sustainability, MDPI, vol. 17(2), pages 1-28, January.
    16. Gia Ninh Nguyen & Sandeep Salunke, 2025. "The role of servitization in turbulent markets: evidence from Malaysian manufacturing companies," Economia e Politica Industriale: Journal of Industrial and Business Economics, Springer;Associazione Amici di Economia e Politica Industriale, vol. 52(2), pages 313-357, June.
    17. Bindu Singh & M.K. Rao, 2017. "To Gear Up Firm Performance in Banking Industry: The Role of Dynamic Capability," Global Business Review, International Management Institute, vol. 18(4), pages 1019-1040, August.
    18. Gelhard, Carsten & von Delft, Stephan, 2016. "The role of organizational capabilities in achieving superior sustainability performance," Journal of Business Research, Elsevier, vol. 69(10), pages 4632-4642.
    19. Muhammad Farooq Islam & Ozge Can, 2024. "Integrating digital and sustainable entrepreneurship through business models: a bibliometric analysis," Journal of Global Entrepreneurship Research, Springer;UNESCO Chair in Entrepreneurship, vol. 14(1), pages 1-18, December.
    20. Thomas, Llewellyn D.W. & Snihur, Yuliya, 2025. "Ecosystem framing and infomediary resonance: Amazon’s early years (1995–2003)," Technovation, Elsevier, vol. 140(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jsusta:v:17:y:2025:i:12:p:5296-:d:1674409. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.