The Impact of Digital Leadership on Performance: Examining the Roles of Big Data Analytical Capabilities, Green Innovation, and AI Change Readiness in Italian SMEs

ABSTRACT In today's rapidly transforming world, a leader's digital capabilities have become crucial for firms to achieve better performance. This study examines the influence of digital leadership (DL) capabilities on performance (both economic and environmental) with the inclusion of multiple mediators and a moderator. Specifically, three interesting but complex relationships are examined: (1) the mediation of big data analytical capabilities (BDAC) between DL capabilities and green innovation (GI), (2) the indirect effect of GI between BDAC and performance, and (3) the moderating effect of artificial intelligence (AI) change readiness on the relationship between DL capabilities and BDAC. These relationships are tested with time‐lagged data from 221 small‐ and medium‐sized enterprises (SMEs). Structural equation modeling results demonstrate that BDAC significantly mediates the relationship between DL capabilities and GI. Additionally, GI significantly mediates BDAC's effect on both economic and environmental performance. Finally, AI change readiness significantly strengthens the ties between DL capabilities and BDAC. The findings extend the leadership, AI, big data, and GI literature and highlight how their interplay can be beneficial for achieving better environmental and economic performance in the digital era.