Unlocking digital transformation: the impact of IT intellectual capital and market turbulence

Purpose In the current digital business landscape, businesses heavily rely on their information technology (IT) departments to drive digital transformation initiatives. However, firms often face challenges in obtaining sufficient backing from their IT departments for such initiatives. This research explores the influence of IT departments’ intellectual capital, referred to as IT intellectual capital, on digital transformation under varying degrees of market turbulence. Design/methodology/approach A survey was employed to collect data from 296 IT managers and business managers from 148 firms in China. We used the seemingly unrelated regression to test hypotheses. Findings This study indicates that each category of IT intellectual capital – namely, IT human capital, structural capital and social capital – contributes positively to digital transformation. IT social capital mediates the effects of IT human and structural capital on digital transformation. Besides, market turbulence amplifies the effect of IT human capital on digital transformation, whereas it diminishes the influence of IT social capital on digital transformation. Practical implications Practitioners need to recognize the strategic role of IT intellectual capital in advancing digital transformation and develop appropriate IT intellectual capital according to the market environments in which the firm operates. Originality/value The study introduces novel perspectives on the antecedents of digital transformation and enhances the intellectual capital literature by revealing the influence of different types of IT intellectual capital on digital transformation under various levels of market turbulence.