Does Digital Capabilities Foster Social Innovation Performance in Social Enterprises? Mediation by Firm-Level Entrepreneurial Orientation

Abstract

Social innovation as an outcome of social entrepreneurship represents the primary drive of social enterprises (SEs). In the emergent context of a digitally transforming entrepreneurship scenario, this study intends to investigate the role of digital capabilities (DC) in social innovation performance (SIP) in SEs while considering the underlying effects of a firm-level entrepreneurial orientation (EO). Utilizing a quantitative survey approach, the study acquired a total of 344 valid responses from SEs in Saudi Arabia. The data analysis performed through partial least square structural equation modeling (SmartPLS 3.0) revealed that DC have no direct impact on SIP in SEs. However, DC influence SIP through the full mediation effects of EO dimensions of social proactiveness, and social innovativeness. The mediation effects of social risk-taking on the DC-SIP relationship were not established. This work is the first to conceptualize and test a theoretical framework linking the DC and EO constructs concerning SIP in SEs. As a result, the study produces several academic and managerial implications underpinning social innovation amid the digitally transforming entrepreneurship context in SEs.