Linking dynamic entrepreneurial capabilities and behavioral intentions to adopt FinTech in small and medium enterprises through digital financial innovation

Abstract

Despite the growing attention to FinTech adoption, there is inadequate investigation into the underlying mechanisms that explain the linkage between dynamic entrepreneurial capabilities and FinTech adoption. This gap is addressed by investigating the mediating effect of digital financial innovation on the relationship between dynamic entrepreneurial capabilities and the behavioral intention of SMEs towards the adoption of FinTech. Using a quantitative approach, the data on the study was gathered from 381 SMEs and analyzed by using covariance-based structural equation modeling. The results reveal that dynamic entrepreneurial capabilities significantly influence the intention to adopt FinTech both directly and through digital financial innovation. This study adds to the theoretical understanding of the mediating effect of digital financial innovation on the link between dynamic entrepreneurial capabilities and SMEs’ behavioral intention to adopt FinTech. The study enriches the dynamic capability theory and the theory of planned behavior by showing the meaningfulness of adaptability in resource utilization and behavior intentions towards FinTech adoption. Additionally, this study highlights the need of embracing technologies and entrepreneurial capabilities, as well as strategic alliances with FinTech providers. These steps are crucial to enable SMEs to work their way through the evolving digital world and, hence, integrate FinTech into their operations.