Dynamic Capabilities of SMEs: The Mediating Role of Digital Transformation in Achieving Sustainable Procurement

Research Aims: This research investigates the dynamic capabilities of MSMEs to support economically, socially and environmentally sustainable procurement. In addition, this study proves empirically that dynamic capabilities play an important role in increasing sustainability in procurement via digital transformation. Design/methodology/approach: This research designs the collection using a purposive random sampling technique. This research also maintains the validity and reliability of the two structural models to produce quality conclusions. Research Findings: This study's findings show that dynamic capability significantly affects digital transformation. In addition, digital transformation are related to innovativeness and sustainability in procurement. Theoretical Contribution/Originality: The role of digital transformation in supporting innovativeness and sustainability. This research focuses on the importance of dynamic capabilities. In addition, it understands that digital transformation are important to accommodate MSMEs that achieve high growth opportunities for economic, social and environmental sustainability. Research limitation and implication: This research is limited to the perspective of MSME players; it only uses a survey method with a web questionnaire and is limited to aspects of dynamic capabilities, digital transformation, innovation, and sustainability in procurement. The implications of this research can provide insights for MSMEs to accelerate their digital transformation and for policymakers to design programmes that support innovation and sustainability in government procurement.