A PLS-SEM Investigation of Digital Transformation Intensity as a Mediator Among NSE-Listed Firms
Author(s): Ananya Bhattacharya
Affiliation: Department of Commerce, Jadavpur University, Kolkata, West Bengal, India
Page No: 26-30-
Volume issue & Publishing Year: Volume 3, Issue 3, 2026/03/07
Journal: International Journal of Modern Engineering and Management | IJMEM
ISSN NO: 3048-8230
DOI:
Abstract:
Digital transformation has emerged as the defining strategic imperative of the current decade for listed Indian corporations, yet empirical evidence on the specific leadership and organisational capabilities that convert digital investment into sustained competitive advantage remains fragmented. Large-sample studies of NSE-500 firms reveal substantial variation in digital transformation outcomes: firms with comparable IT expenditure as a proportion of revenue demonstrate return-on-assets spreads of over 8 percentage points, suggesting that organisational factors rather than technology investment magnitude are the primary determinants of transformation success. Identifying these organisational antecedents and the causal pathways through which they affect performance is the central motivation of this study.
This paper develops and tests a structural model in which Digital Leadership Capability (DLC), Organisational Ambidexterity (OA), and IT Infrastructure Readiness (ITR) jointly drive Digital Transformation Intensity (DTI), which in turn mediates the relationship with firm performance (return on assets, Tobin’s Q) and innovation output. Dynamic Capabilities (DYNCP) are hypothesised to moderate the DTI-to-performance path. PLS-SEM is applied to primary survey data from 412 senior executives (C-suite and IT heads) in NSE-listed manufacturing and services firms across financial years 2018-2023, supplemented by firm-level secondary data from CMIE Prowess. Measurement model validity is confirmed through average variance extracted (AVE), composite reliability (CR), and HTMT discriminant validity ratios.
All five hypothesised paths are supported at p < 0.01 or better. DLC exerts the strongest direct influence on DTI (β=0.42, p<0.001), followed by OA (β=0.31) and ITR (β=0.28). DTI significantly mediates the path to firm performance (β=0.54, p<0.001) and innovation output (β=0.38, p<0.001). Dynamic capabilities moderate the DTI-performance path (γ=0.19, p<0.05), confirming that firms with stronger sensing-seizing-reconfiguring routines realise higher performance returns from equivalent digital transformation investments. Model fit indices (CFI=0.964, RMSEA=0.048, SRMR=0.051) confirm adequate structural model fit.
Keywords:
digital transformation, digital leadership, organisational ambidexterity, PLS-SEM, firm performance, dynamic capabilities, NSE-listed firms, IT infrastructure, innovation, India, structural equation modelling, HTMT, Tobin's Q
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