Strategic Renewal Meets Organizational Changes: What Shapes Incumbent's Return to Digital Technologies Investments?

ABSTRACT A unique feature of digital technologies is their broad impact at both business and market dynamics levels. While the first impact is often studied by scholars under the lens of digital transformation (DT), the second is often separately addressed by the analysis of strategic renewal to adapt to the new environment. Here, we assess the interaction between organizational changes and the level of boldness of strategic renewal associated with DT, through a series of cross‐sectional samples of firms engaging in DT worldwide. We find that organizational capabilities mediate boldness in strategic renewal, which in turn strongly determines the return on investing in digital technologies for incumbent firms.