Digital Transformation and Firm Performance: Empirical Evidence from MENA Listed Companies
DOI:
https://doi.org/10.51325/e6mmbg11Keywords:
Digital Transformation, Firm Performance, MENA, Emerging Markets, Digital Innovation, Technology AdoptionAbstract
This study empirically examines the relationship between digital transformation (DT) intensity and firm performance among companies listed on stock exchanges across the Middle East and North Africa (MENA) region. Digital transformation—defined as the strategic integration of digital technologies into core business operations, customer engagement, and organizational processes—has been widely hypothesized to improve firm performance, yet large-scale empirical evidence from MENA emerging markets remains limited. Drawing on a primary survey dataset of 186 senior managers and C-suite executives across 94 MENA-listed firms collected between October 2023 and March 2024, this study operationalizes DT intensity across four dimensions: cloud infrastructure adoption, data analytics capability, digital customer interface maturity, and internal process automation depth. Firm performance is measured using three indicators: return on assets (ROA), revenue growth rate, and a composite operational efficiency index. Ordinary least squares (OLS) regression with robust standard errors and moderation analysis reveal that DT intensity is positively and significantly associated with all three performance indicators, with the strongest effect on operational efficiency (β = 0.412, p < 0.001). Innovation culture and leadership digital literacy significantly moderate the DT-performance relationship, with both variables amplifying performance returns to DT investment. Firm size negatively moderates the DT-ROA relationship, consistent with the hypothesis that digital agility advantages are larger in smaller MENA firms. These findings contribute to the emerging literature on digital transformation in developing economy contexts and offer actionable guidance for MENA executives navigating technology-driven competitive disruption.
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