Digital leadership as micro-foundations of digital transformation, technology adaptive capability and financial performance

Purpose Based on leadership theory and dynamic capabilities, this research investigates the impact of digital leadership on digital transformation, technology adaptive capability and firm financial performance. It also explores the mediation of digital transformation and technology adaptability in the relationship between digital leadership and financial performance. Design/methodology/approach We collected data from 208 firm managers in Türkiye using a survey, one of the quantitative research techniques and analyzed the data using Smart PLS software and structural equation modeling. Findings Digital leadership positively influences digital transformation and technology adaptive capability. Additionally, the findings show that digital transformation positively affects technology adaptive capability and that technology adaptive capability positively impacts financial performance. Furthermore, digital transformation mediates the relationship between digital leadership and technology adaptive capability. In addition, technology adaptive capability mediates the relationship between digital leadership and financial performance. Originality/value To the best of the authors’ knowledge, this research is the first to examine digital leadership, based on leadership theory, within the micro-foundations of digital transformation and technology adaptive capability grounded in dynamic capabilities.