Title: The Impact of Digital Transformation and Supply Chain Efficiency on Financial Sustainability in Fashion SMEs: The Mediating Role of Market Adaptability Capability and Moderating Effect of Environmental Pressure
Authors: Linh Ngoc NGUYEN and Nhat Anh DINH
Volume: 9
Issue: 3
Pages: 148-159
Publication Date: 2025/03/28
Abstract:
This study investigates the complex relationship between digital transformation (DT), supply chain efficiency (SCE), and financial sustainability (FS) in fashion small and medium-sized enterprises (SMEs) whilst introducing market adaptability capability (MAC) as a mediating variable and environmental pressure (EP) as a moderating factor. Drawing upon the Resource-Based View (RBV), Dynamic Capabilities Theory, and Institutional Theory, this study develops an integrated conceptual framework to examine these interrelationships. Empirical analysis using partial least squares structural equation modeling (PLS-SEM) on data collected from 290 Vietnamese fashion SMEs reveals that digital transformation and supply chain efficiency significantly enhance market adaptability capability, subsequently improving financial sustainability. Furthermore, market adaptability capability fully mediates the relationships between digital transformation, supply chain efficiency, and financial sustainability. The study also confirms that environmental pressure positively moderates the effects of digital transformation and supply chain efficiency on market adaptability capability. This research contributes to the existing literature by elucidating the intricate mechanisms through which technological and operational capabilities influence financial outcomes in fashion SMEs, particularly highlighting the crucial mediating role of adaptability in volatile markets and the amplifying effect of environmental pressures. These findings provide valuable insights for fashion SME managers seeking to navigate digital transformation initiatives, optimize supply chain operations, and enhance market responsiveness whilst fulfilling sustainability expectations.