The positive impact of transformational leadership on digital transformation and innovation in agri-food SMEs

Abstract

This study analyzes the influence of transformational leadership on organizational performance in small and medium enterprises (SMEs) in the context of Spain’s agri-food sector, an industry challenged by fragmentation, cultural resistance, and substantial resource limitations. Using survey data from 167 firms and applying Structural Equation Modeling (SEM), the analysis identifies the mediating effects of digital transformation, digital competencies, innovation, and corporate entrepreneurship. Results show that transformational leadership directly enables digital transformation, develops digital competencies, and drives innovation; and that both digital transformation and digital competencies significantly enhance innovation, catalyzing corporate entrepreneurship and producing superior organizational performance. The study empirically validates the proposed integrative model, defining the pathways by which leadership generates competitive advantage. The research contributes by synthesizing these critical constructs and providing practical guidance for managers and policymakers to advance digitalization and entrepreneurial development in agri-food SMEs.