From Digital Readiness to Enterprise Competitiveness: A Moderated-Mediation Framework Integrating Resource-Based View, Dynamic Capabilities, and Strategic Cognition for Service SMEs

Abstract

The digital transformation of small and medium-sized enterprises (SMEs) has emerged as a central concern in strategic management scholarship, yet a persistent “digitalization paradox”—wherein substantial technology investments fail to yield commensurate competitive returns—continues to plague resource-constrained service firms, particularly in hyper-competitive emerging market contexts. Drawing upon the theoretical integration of the Resource-Based View, Dynamic Capabilities Theory, and Strategic Cognition Theory, this paper proposes a comprehensive moderated-mediation conceptual framework explaining how digital readiness translates into enterprise competitiveness among service SMEs. The framework identifies five interdependent digital resource antecedents—IT capability, digital transformation strategy, technology investment, leadership quality, and employee digital skills—that collectively constitute a theoretically-derived resource bundle. Enterprise innovation is positioned as the pivotal mediating mechanism converting these static digital inputs into dynamic competitive outputs, while organizational cognition operates as a critical boundary condition moderating the innovation-to-competitiveness pathway. Twelve theoretically-grounded propositions are developed: five direct effect propositions linking each digital resource to competitiveness, one direct effect proposition for innovation, five mediation propositions for the innovation-mediated pathways, and one moderation proposition for the cognitive boundary condition. By systematically decomposing the “black box” of value creation and specifying the cognitive boundary conditions under which digital transformation succeeds or fails, this paper makes three specific contributions to the literature: (1) a unified, theoretically-derived resource bundle for SME digital transformation that moves beyond single-factor analyses; (2) a process-oriented explanation of how digital inputs become competitive outputs through the mediating engine of enterprise innovation; and (3) the integration of strategic cognition as a moderating boundary condition that determines whether innovative efforts translate into sustainable competitive advantage. The framework is particularly relevant to growth-oriented service SMEs operating in high-pressure, resource-constrained environments such as Beijing, China, where the digitalization paradox is most acutely manifest.