Exploring knowledge management in metaverse-driven business model innovation: empirical evidence from knowledge-intensive firms

Purpose The rapid adoption of the metaverse is reshaping business landscapes, presenting new opportunities for business transformation. Digital transformation is a transformative process that critically examines and leverages the adoption of digital technologies to redesign business models and operations. Despite growing interest, there is limited research on how metaverse adoption influences, absorptive capacity, business model innovation and business digital transformation. To fill this gap, this study aims to examine the relationship between metaverse adoption, absorptive capacity, business model innovation and business digital transformation. Design/methodology/approach Drawing on the resource-based view conceptual model was developed to explain the role of metaverse adoption and absorptive capacity in business model innovation and business transformation. The research hypotheses were tested by using the data of employees of various industries from the UK and the USA. Data was collected through Prolific by using a survey questionnaire from 303 respondents. Data was analyzed by using SEM with AMOS 24.0. Findings The results showed that metaverse adoption and absorptive capacity significantly contribute to business model innovation and business transformation. The key findings indicate that metaverse adoption and absorptive capacity enhance business model innovation and business transformation. Practical implications Study results are useful for research scholars and managers in developing strategies to develop metaverse adoption and absorptive capacity, and promoting business model innovation and business transformation. Managers should develop absorptive capacity to enable the smooth adoption of the metaverse, which signifies the business model innovation and business transformation. Originality/value This study underscores the significance of the role of the metaverse and absorptive capacity in driving business model innovation and business transformation. Drawing on the resource-based view, the study’s findings offer empirical support for the role of the metaverse and absorptive capacity toward business model innovation and business transformation. Thereby enhancing existing literature on the metaverse and knowledge management by addressing the underexplored topic of the metaverse in the business world.