From ESG orientation to sustainable enterprise value creation: the role of digital innovation capability

Purpose Drawing on institutional, dynamic capability, and social cognitive theories, this study examines the effects of environmental, social, and governance (ESG ) orientation, institutional pressure, and entrepreneurial self-efficacy on sustainable entrepreneurial outcomes through Digital Innovation Capability (DIC). Design/methodology/approach Data were collected from 673 entrepreneurs across manufacture and service sectors. The study employs various statistical analyses to analyse the proposed relationships and evaluate the mediation role of digital Innovation Capability in linking the antecedent factors to Sustainable Entrepreneurial Performance and Long-term Value Creation. Findings The findings confirm the mediation of digital innovation capability in the relationships between ESG orientation, institutional pressure, entrepreneurial self-efficacy, and the two outcome variables. Among the antecedents, ESG orientation exerts the strongest influence on digital innovation capability, followed by institutional pressure and entrepreneurial self-efficacy. Practical implications The study shows that long-term value creation depends on a distinct configuration of the same antecedents, in which institutional pressure retains a direct, legitimacy-based path alongside the capability-mediated route, indicating that durable value creation is not governed by the same mechanism as current-period performance. Originality/value The study advances understanding by differentiating a capability-mediated pathway from a legitimacy-mediated pathway through which ESG orientation, institutional pressure, and entrepreneurial self-efficacy contribute to sustainable performance and long-term value creation. The results indicate these pathways exert distinct effects across outcomes rather than functioning as a uniform explanatory mechanism.