The moderating effect of digital transformation on environmental turbulence in emerging economies-advancing business model innovation research

Purpose This study examines how different dimensions of environmental turbulence (technological, market and competitive) influence business model innovation (BMI) in emerging economies and how digital transformation (DT) moderates these relationships. Anchored in contingency theory and informed by the concept of reverse agency, the study explores how DT enables firms to shift from reactive to proactive strategic responses under turbulence. It analyses the impact of DT on value creation, proposition and capture mechanisms and their implications for firm performance. The research contributes to understanding how digitally enabled firms in volatile contexts reconfigure innovation pathways to improve adaptive capacity. Design/methodology/approach Based on data from 271 Colombian firms, a partial least squares structural equation model was developed to assess how turbulence – comprising technological, competitive and market turbulence – affects the three dimensions of BMI (value creation, value proposition and value capture) and firm performance. A multigroup analysis compared the responses of exporting and non-exporting firms. Findings We found that digital transformation significantly moderates the relationship between environmental turbulence and BMI, and BMI positively influences performance. Exporters and non-exporters differ in their adaptive strategies: exporters use digital transformation to enhance value creation and performance, while non-exporters emphasise internal value capture mechanisms. Practical implications The study introduces the managerial action model for business innovation (MAMBI) framework – a five-step, evidence-based guide to help firms align digital transformation and business model innovation with environmental turbulence. It offers actionable tools and KPIs, particularly valuable for SMEs in emerging markets aiming to enhance strategic adaptability and performance. Originality/value This is among the first studies to disaggregate both ET and BMI while modelling DT as a moderating variable. By integrating contingency theory and agency reversal, the study provides a novel framework for understanding digital adaptation in turbulent environments. The multigroup analysis offers new insights into how internationalisation conditions shape adaptive strategies, extending the contingency theory literature on digital transformation.