The mediating role of digital transformation in the effect of dynamic capabilities and innovation culture on sustainable performance

The purpose of this study is to investigate the mediating role of digital transformation in the effect of dynamic capabilities and innovation culture on sustainable performance. In this context, the hypotheses are constructed using structural equation modelling through SmartPLS and are tested on 179 firms in the '500 firms with the highest R&D expenditure' list published by TurkishTime magazine in 2021. The results indicate that, while firms' dynamic capabilities and digital transformation positively affect sustainable performance, innovation culture has no direct effect on sustainable performance. Yet, dynamic capabilities and innovation culture of firms positively affect digital transformation. Lastly, it is found that digital transformation has a mediating role in the effect of firms' dynamic capabilities and innovation culture on sustainable performance. The research model explained by dynamic capabilities and innovation culture approaches, focuses on the dynamic capabilities of firms, standing out with their R&D expenditures, in increasing sustainable performance, the need for organisational culture to support innovation and the role of digital transformation among their interactions. It is evaluated that the proposed model contributes to the existing knowledge by filling various research gaps.