Digital transformation of SMEs: the nexus of entrepreneur orientation, artificial intelligence adoption and digital literacy

Purpose This study aims to explore the relationship between entrepreneur orientation (EO) and digital transformation (DT) within the context of small and medium-sized enterprises (SMEs) while considering their interactions with artificial intelligence adoption (AIA), and digital literacy (DL). Design/methodology/approach Grounded in the resource-based view, this research develops a theoretical framework to investigate the direct impact of EO on DT, the mediating effects of AIA and the moderating effects of DL. To analyze survey responses from 189 SMEs, this study uses Partial Least Squares Structural Equation Modeling and SPSS. Findings EO-risk-taking positively influences DT. Furthermore, AIA serves as a full mediator in the relationships between EO-innovativeness and EO-proactiveness and DT. In contrast, it serves as a partial mediator in the relationship between EO-risk-taking and DT. In addition, DL moderates the relationships between EO-innovativeness and EO-proactiveness and DT. Research limitations/implications By proposing and validating an integrative model that combines these constructs, this research advances theoretical understanding and provides practical guidance for SME entrepreneurs and policymakers seeking to foster DT through AIA and DL in SMEs. Originality/value This study investigates EO in the context of DT, combining AIA and DL and provides practical implications for SMEs’ DT by exploiting the firm’s EO intensity. The insight of this work is that SMEs should focus on EO to cultivate DT, integrate AI and improve DL.