The relationship between AI adoption and sustainable performance through digital transformation among overseas study agency SMEs in China

As governments and industries increasingly prioritize digital economy strategies and sustainability objectives, greater attention has been paid to the relationships among artificial intelligence (AI) adoption, digital transformation (DT), and sustainable performance (SP). However, limited research has examined these relationships in small and medium-sized enterprises (SMEs), particularly in the context of overseas study agencies (OSAs) in China. Therefore, this study aims to examine the relationships among AI adoption, DT, and perceived SP and to assess the mediating role of DT in the relationship between AI adoption and perceived SP. A quantitative research approach was employed using perceptual survey data collected from 554 individual respondents working in sampled OSA SMEs in China and reflecting their perceptions of organizational practices and performance. The proposed hypotheses were tested using partial least squares structural equation modeling. The results indicate that AI adoption is positively associated with DT and perceived SP, while DT is positively associated with perceived SP and partially mediates the relationship between AI adoption and perceived SP. Overall, the findings provide empirical insights consistent with the perspective of Dynamic Capability Theory, suggesting that AI adoption is associated with perceived sustainable performance both directly and indirectly through digital transformation within the sampled service-oriented SMEs. The findings also offer practical implications for organizations and policymakers seeking to support sustainable and digitally enabled development.