Digital technologies and the financial performance of female SMES in Serbia: The mediating role of innovation

Abstract

Digital technologies that create innovation have the capacity to leverage economic development. The integration of digital technologies in daily operations has become a key success factor in sustainable development, market positioning, and advancement. This is particulary challenging for female companies in developing countries, which face numerous biases on their entrepreneurial path, including in innovation. This specific group of entrepreneurs faces additional barriers in implementing digital technologies and digital transformation, which are considered part of their innovation capacity. However, some companies perform well according to financial parameters, regardless of the level of digitization and innovation potential. This research paper explores the correlation between financial performance and the innovative implementation of digital technologies. The main assumption in this research is that companies that do not use digital technologies to innovate can not expect to improve their financial performance. We focus on the impact of digital technology on the financial performance of female companies. We also consider the indirect impact of digital technology use on financial performance, with product innovation as the mediator variable. The sample consists of 46 female companies. The results of the analysis confirm the hypotheses that digital technology has no direct influence on financial performance, and that product innovation mediates the relationship between digital technology and financial performance.