Digital Business Models and Financial Performance: On the Importance of Business Renewal

Abstract

This study focuses on the mediating role of business renewal in the relationship between digital business models and financial performance. An enhanced understanding of the direct and indirect influences of digital business models and business renewal will aid the construction of a more comprehensive picture of managing business models in digital transformation. The results are based on a survey of 275 Finnish SMEs. The results confirm the mediating effect of business renewal between digital business models and financial performance. This means that changes in the digital business model cannot, on their own, cause any changes in financial performance; however, through business renewal, changes in the digital business model can impact financial performance.