The impact of innovation framework conditions on corporate digital technology integration: institutions as facilitators for sustainable digital transformation
Abstract
This article is concerned with the impact of corporate digitalization on the corporate sustainability performance and with barriers and supportive institutional frameworks for corporate digital technology adaptation. Collected from big data sets such as the Digital Economy and Society Index (DESI) country reports and the Global Innovation Index (GII), our study draws on data from 29 European countries. A series of multiple linear regressions was run to select the most relevant predictors of corporate digital technology adaptation. The results suggest that Rule of Law, Government Effectiveness and Ease of Starting a Business are the institutional framework pillars that best predict corporate digital technology adaptation levels. Our findings further show that high levels of corporate digital technology adaptation occur where institutional frameworks are well-integrated across several social domains (economy, politics, legal system, etc.). We conclude by highlighting implications for the design of digital policies aiming at a strategic integration of digital technology adaptation and corporate sustainability.
First published online 14 June 2022
Keyword : innovation pillars, corporate digital technology integration, sustainability, digitalization, Global Innovation Index, institutions
How to Cite
Ionescu, A. M., Clipa, A.-M., Turnea, E.-S., Clipa, C.-I., Bedrule-Grigoruță, M. V., & Roth, S. (2022). The impact of innovation framework conditions on corporate digital technology integration: institutions as facilitators for sustainable digital transformation. Journal of Business Economics and Management, 23(5), 1037–1059. https://doi.org/10.3846/jbem.2022.17039
This work is licensed under a Creative Commons Attribution 4.0 International License.
References
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Agostino, M., Nifo, A., Trivieri, F., & Vecchione, G. (2020). Rule of law and regulatory quality as drivers of entrepreneurship. Regional Studies, 54(6), 814–826. https://doi.org/10.1080/00343404.2019.1648785
Autio, E., & Thomas, L. D. W. (2014). Innovation ecosystems: Implications for innovation management? In M. Dodgson, D. M. Gann, & N. Phillips (Eds.), The Oxford handbook of innovation management. Oxford University Press. https://doi.org/10.1093/oxfordhb/9780199694945.013.012
Bag, S., Telukdarie, A., Pretorius, J. H. C., & Gupta, S. (2021). Industry 4.0 and supply chain sustainability: Framework and future research directions. Benchmarking: An International Journal, 28(5), 1410–1450. https://doi.org/10.1108/BIJ-03-2018-0056
Bayamlıoğlu, E., & Leenes, R. (2018). The ‘rule of law’ implications of data-driven decision-making: A techno-regulatory perspective. Law, Innovation and Technology, 10(2), 295–313. https://doi.org/10.1080/17579961.2018.1527475
Beier, C. M., Caputo, J., Lawrence, G. B., & Sullivan, T. J. (2017). Loss of ecosystem services due to chronic pollution of forests and surface waters in the Adirondack region (USA). Journal of Environmental Management, 191, 19–27. https://doi.org/10.1016/j.jenvman.2016.12.069
Blichfeldt, H., & Faullant, R. (2021). Performance effects of digital technology adoption and product & service innovation – A process-industry perspective. Technovation, 105, 102275. https://doi.org/10.1016/j.technovation.2021.102275
Botero, J. C., Janse, R., Muller, S., & Pratt, C. (2012). Innovations in rule of law. A compilation of concise essays. The World Justice Project. https://www.hiil.org/wp-content/uploads/2018/09/Innovations-in-Rule-of-Law.pdf
Chakravorti, B., Fillpovic, C., & Chaturvedi, R. S. (2019). Ease of doing digital business 2019. Which countries help expedite entry, growth, and exit of technology-based businesses? https://sites.tufts.edu/digitalplanet/research/ease-of-doing-digital-business/
Chen, C.-L., Lin, Y.-C., Chen, W.-H., Chao, C.-F., & Pandia, H. (2021). Role of government to enhance digital transformation in small service business. Sustainability, 13(3), 1028. https://doi.org/10.3390/su13031028
Cornell University, INSEAD, & WIPO. (2018). The Global Innovation Index 2018: Energizing the world with innovation.
Cornell University, INSEAD, & WIPO. (2020). The Global Innovation Index 2020: Who will finance innovation? https://www.wipo.int/edocs/pubdocs/en/wipo_pub_gii_2020.pdf
Cricelli, L., & Strazzullo, S. (2021). The economic aspect of digital sustainability: A systematic review. Sustainability, 13(15), 8241. https://doi.org/10.3390/su13158241
Deloitte. (2013). Doing business in the digital age: The impact of new ICT developments in the global business landscape – Benchmark analysis. https://ec.europa.eu/docsroom/documents/11201/attachments/1/translations/en/renditions/native
Didenko, A. N. (2018). Regulating FinTech: Lessons from Africa. San Diego International Law Journal 311, 19(2). https://doi.org/10.2139/ssrn.3135604
Dobrolyubova, E., Klochkova, E., & Alexandrov, O. (2019). Digitalization and effective government: What is the cause and what is the effect? In Communications in computer and information science: Vol. 1038. Digital transformation and global society (pp. 55–67). Springer. https://doi.org/10.1007/978-3-030-37858-5_5
Ekman, P., Thilenius, P., Thompson, S., & Whitaker, J. (2020). Digital transformation of global business processes: The role of dual embeddedness. Business Process Management Journal, 26(2), 570–592. https://doi.org/10.1108/BPMJ-02-2019-0080
European Commission. (2018a). Digital Transformation Scoreboard 2018.
European Commission. (2018b). Integration of Digital Technology 2018.
European Commission. (2020). The Digital Economy and Society Index (DESI) from https://digital-strategy.ec.europa.eu/en/policies/desi
Farinha, L., Ferreira, J. J. M., & Nunes, S. (2018). Linking innovation and entrepreneurship to economic growth. Competitiveness Review: An International Business Journal, 28(4), 451–475. https://doi.org/10.1108/CR-07-2016-0045
Golubev, S. S., Veselovsky, M. Y., Andryuschenko, G. I., & Balynin, I. V. (2020). Quality transformation of high technology industrial enterprises corporative management in terms of transition to digital technology. Quality – Access to Success, 21(176), 3–8.
Gregori, P., & Holzmann, P. (2020). Digital sustainable entrepreneurship: A business model perspective on embedding digital technologies for social and environmental value creation. Journal of Cleaner Production, 272, 122817. https://doi.org/10.1016/j.jclepro.2020.122817
Herman, E., & Suciu, M.-C. (2019). Towards a smart, inclusive and sustainable development. Investment in human capital and innovation. An empirical analysis. Proceedings of the International Conference on Business Excellence, 13(1), 792–803. https://doi.org/10.2478/picbe-2019-0070
Hetemi, E., Ordieres-Meré, J., & Nuur, C. (2020). An institutional approach to digitalization in sustainability-oriented infrastructure projects: The limits of the building information model. Sustainability, 12(9), 3893. https://doi.org/10.3390/su12093893
Hinings, B., Gegenhuber, T., & Greenwood, R. (2018). Digital innovation and transformation: An institutional perspective. Information and Organization, 28(1), 52–61. https://doi.org/10.1016/j.infoandorg.2018.02.004
Hinson, R., Lensink, R., & Mueller, A. (2019). Transforming agribusiness in developing countries: SDGs and the role of FinTech. Current Opinion in Environmental Sustainability, 41, 1–9. https://doi.org/10.1016/j.cosust.2019.07.002
Huang, C. H., Chou, T.-C., & Liu, J. S. (2021). Understanding the intrinsic nature of the trends of digital innovation: A main path analysis. In Hawaii International Conference on System Sciences. University of Hawaii at Mānoa. https://doi.org/10.24251/HICSS.2021.715
Kawabata, M. K., & Camargo Junior, A. S. (2020). Innovation and institutions’ quality: A comparative study between countries. International Journal of Innovation Science, 12(2), 169–185. https://doi.org/10.1108/IJIS-10-2019-0100
Liu, D. Y., Chen, S. W., & Chou, T. C. (2011). Resource fit in digital transformation. Management Decision, 49(10), 1728–1742. https://doi.org/10.1108/00251741111183852
Mosconi, F., & D’Ingiullo, D. (2021). Institutional quality and innovation: Evidence from Emilia-Romagna. Economics of Innovation and New Technology. https://doi.org/10.1080/10438599.2021.1893140
Osburg, T., & Lohrmann, C. (2017). Sustainability in a digital world. Springer International Publishing. https://doi.org/10.1007/978-3-319-54603-2
Osmundsen, K., Iden, J., & Bygstad, B. (2018, September). Digital transformation: Drivers, success factors, and implications. MCIS 2018 Proceedings, 37.
Othman, M. H., Razali, R., & Nasrudin, M. F. (2020). Key factors for e-government towards sustainable development goals. International Journal of Advanced Science and Technology, 29(6s), 2864–2876. http://sersc.org/journals/index.php/IJAST/article/view/15798
Roth, S. (2019). Digital transformation of social theory. A research update. Technological Forecasting and Social Change, 146, 88–93. https://doi.org/10.1016/j.techfore.2019.05.016
Roth, S. (2021). The Great reset. Restratification for lives, livelihoods, and the planet. Technological Forecasting and Social Change, 166, 120636. https://doi.org/10.1016/j.techfore.2021.120636
Ruiz-Real, J. L., Uribe-Toril, J., Torres, J. A., & De Pablo, J. (2021). Artificial intelligence in business and economics research: Trends and future. Journal of Business Economics and Management, 22(1), 98–117. https://doi.org/10.3846/jbem.2020.13641
Salimova, T., Vukovic, N., & Guskova, N. (2020). Towards sustainability through Industry 4.0 and Society 5.0. International Review, (3–4), 48–54. https://doi.org/10.5937/intrev2003048S
Schreckling, E., & Steiger, C. (2017). Digitalize or drown. In G. Oswald & M. Kleinemeier (Eds.), Shaping the digital enterprise: Trends and use cases in digital innovation and transformation (pp. 3–27). Springer International Publishing. https://doi.org/10.1007/978-3-319-40967-2_1
Sestino, A., Prete, M. I., Piper, L., & Guido, G. (2020). Internet of Things and Big Data as enablers for business digitalization strategies. Technovation, 98, 102173. https://doi.org/10.1016/j.technovation.2020.102173
United Nations Office on Drugs and Crime. (2020). Act 4 Rule of Law. Innovation, technology and the rule of law. Retrieved October, 14, 2021 from http://www.act4ruleoflaw.org/en/news/technology
World Intellectual Property Organization. (2021). Global Innovation Index (GII). Retrieved October, 10, 2021, from https://www.wipo.int/global_innovation_index/en/2021/
Wut, T. M., Lee, D., Ip, W. M., & Lee, S. W. (2021). Digital sustainability in the organization: Scale development and validation. Sustainability, 13(6), 3530. https://doi.org/10.3390/su13063530