How Innovation Entry Modes Drive International Business Performance in the Digital Age: The Mediating Role of Organisational Agility and the Moderating Role of Digital Capabilities

HRMARS - Purpose: This study aims to dissect the underlying mechanisms and boundary conditions through which the Innovation Entry Mode (IEM) influences the International Business Performance (IBP) of Small and Medium-sized Enterprises (SMEs). Specifically, a moderated mediation model is constructed to examine the mediating role of Organisational Agility (OA) and the moderating role of Digital Capability (DC). Methodology: Hypotheses were tested using covariance-based structural equation modelling (CB-SEM) based on questionnaire data collected from 130 internationalising SMEs across multiple regions in China. Findings: Innovation entry modes exert a direct positive influence on international business performance, whilst also indirectly impacting it by enhancing organisational agility. Furthermore, digital capabilities not only directly bolster international business performance but also positively mediate the relationship between innovation entry modes and organisational agility, as well as between organisational agility and international business performance. Research limitations: The data in this study are based solely on cross-sectional information; future longitudinal research may be employed to validate causal relationships. Furthermore, exploration of additional potential mediating variables and moderating variables could provide a more comprehensive understanding of this complex phenomenon. Value: By revealing the intrinsic mechanisms and boundary conditions through which innovation entry modes enhance international performance, this study offers a novel perspective for the internationalisation of SMEs. Enterprises should systematically position innovation entry modes, organisational agility, and digital capabilities as a synergistic “strategic triangle”, thereby effectively elevating their international competitiveness in the digital era.