Direct and indirect effects of digital transformation on sustainable development in pre- and post-pandemic periods

Abstract

From a business perspective, increased awareness of sustainability means an alteration in the means of production to offer more environmentally friendly goods and services. Digital transformation plays an important role in enabling companies to achieve their goals. The specialized literature has focused on analyzing this direct relationship. However, the indirect effects between both variables are also important because digital transformation can affect sustainable development through other variables, such as entrepreneurial motivation and talent. The objective of this study is to analyze the direct and indirect relationships between digital transformation and sustainable development, considering some of the variables that could affect digital transformation, such as governance and innovation. An empirical study was developed for the case of 15 European countries. We used a structural equation model to verify the relationships in three periods: a general model for the years 2019–2022; a model that includes a contractionary period such as that caused by COVID-19 (years 2019–2020); and a representative model of an expansionary period, occurring after removing the restrictions imposed during the pandemic (years 2021–2022).