PROBING ECONOMIC ENABLERS OF DIGITAL GROWTH: THE INNOVATION ADOPTION AS A STRATEGIC MEDIATOR

Abstract

This study examines the economic enablers influencing digital enterprise growth in context of an emerging economy, focusing on market dynamism, credit availability, and entrepreneurial human capital. Anchored in the theoretical foundations of innovation economics and digital development, the study investigates how structural and cognitive economic inputs foster digital business expansion, with innovation adoption acting as a mediating mechanism. Using primary data collected from 300 digital entrepreneurs across Pakistan, study employs Partial Least Squares Structural Equation Modeling (PLS-SEM) to analyze hypothesized relationships. The findings reveal that all three independent variables significantly and positively influence digital enterprise growth, both directly and indirectly through innovation adoption. In this connection, the mediating effect of innovation adoption underscores its pivotal role in translating economic potential into entrepreneurial performance. This research offers valuable insights for the economic policymakers, development institutions, along with the private sector stakeholders aiming to advance the digital economic development through targeted reforms and innovation-supportive policies towards the sustainable development.