Analyzing the Factors of Business Digitalization and Their Impact on the Entrepreneurial Growth of the Handmade Toy Industry

ABSTRACT The purpose of this research is to examine the impact of various factors of business digitalization, such as digital procurement (DP), digital technology (DT), artificial intelligence (AI), digital social media (DSM), digital marketing and sales administration (DMA), on entrepreneurial growth (EG) in the handmade toy industry. This study also explores the mediating impact of managing the flow of the supply chain (MSC) between DSM and EG and the moderating impact of management with customers (RMC) on EG. In this study, researchers used a field survey method for data collection with a sample of 150 to validate the proposed hypothesis through convenience sampling from young handmade toy business owners from the State of Uttar Pradesh, India. For data analysis, this study used a partial least square (PLS)‐SEM tool to check the validity and reliability of the suggested model. The study findings prove entrepreneurial growth is much more affected by various factors of digitalization, such as DP, AI, DT, and DSM. These factors have a significant impact on entrepreneurial growth. This study investigates young entrepreneurs' (artisans') entrepreneurial leadership in marketing, supply, and production exploration as the role of AI, DT, DSM, and TM has remained unexplored. The results suggest that the top executives should work on identifying and developing various factors that can boost the entrepreneurial growth of the handmade toys industry. This study is unique because no study has been done on the impact of AI, DSM, and DT on the Indian handmade toys industry. This study used the Dynamic Capability Theory (DCT), resource‐based view (RBV) and extended the digital capability perspective.