Dynamic managerial capabilities for digital transformation in innovative SMEs: What are the effects on new product development performance?

In innovative SMEs, the CEO is the main decision-maker for digital transformation (DT). This study focuses on the specific microfoundations of CEOs’ dynamic managerial capabilities (DMCs) by examining how their general expertise, digital expertise, external connectivity, and empowering leadership influence DT. Additionally, based on upper echelons theory, we also examine how CEO tenure and age moderate the relationship between the CEO’s DMCs and DT. Finally, we investigate the link between DT and new product development (NPD) performance. Using survey and archival data from innovative Spanish SMEs, we present three main findings: (1) DMCs enable DT in a non-uniform manner, (2) CEO tenure and age impact some of the positive effects of DMCs on DT, and (3) DT improves NPD performance. Our results provide several scholarly and managerial implications and directions for future research.<p></p>