The effect of supply chain digitalisation on a firm’s performance

Abstract

PurposeBased on the resource-based view (RBV) theory, this study examines how supply chain digitalisation affects firms’ performance by enabling firms to build supply chain agility and innovation capability.Design/methodology/approachDrawing from the dataset of 271 firms in the United Arab Emirates (UAE), we used structural equation modelling to validate the models. Mediation and moderation analyses were performed to test the research hypotheses.FindingsThe results suggest a positive correlation between supply chain digitalisation and a company’s performance, fully mediated by both supply chain agility and innovation capability. The interplay between supply chain agility and innovation capability has the potential to result in unfavourable outcomes for a firm’s performance. These results provide valuable insights into supply chain management during digital transformation.Originality/valueThe study advances the extant research on the antecedents of a firm’s performance by incorporating supply chain digitalisation and mediating mechanisms of supply chain agility and innovation capability that serve as a conduit between supply chain digitalisation and a firm’s performance based on RBV.