The Effect of Innovation and Adaptive Digital Leadership on Employee Performance in Egypt: The Mediating Role of Technical Self-Efficacy

As organizations attempt to retain a competitive advantage, it is becoming more important to understand how employees perform with respect to leadership styles. This paper examines the mediating effect of technical self-efficacy in the relationship between digital leadership and the employee performance of Egyptian service firms. The paper adopts a quantitative research approach, wherein 442 respondents were surveyed from two major Egyptian cities (Cairo and Alexandria). The study employed a purposive sampling technique to select respondents who were assumed to be familiar with the variables under study, like digital leadership practices. Partial Least Squares Structural Equation Modeling was used for the data analysis with the aid of SMART PLS software version 4. The findings reveal that there is a direct positive and statistically significant impact of adaptive leadership on employee performance. Similarly, there is also a positive and significant direct effect of innovative digital leadership on employee performance. This result validates the hypothesis that technical self-efficacy mediates the relationship between innovative digital leadership and employee performance, though partially. The study concludes that technical self-efficacy is one of the main psychological mechanisms that explain how digital-oriented leadership can be translated to better performance, and emphasizes the importance of the confidence and competence of employees in the usage of digital technologies. However, the absence of a significant mediation effect from technical self-efficacy between adaptive leadership and employee performance also shows that adaptive leadership has a direct behavioral and motivational channel of action, instead of an indirect channel of action like technology-based confidence. Thus, the study makes a clear contribution to the literature by advancing a comprehensive model that links digital leadership, employee performance, and technical self-efficacy. In conceptual terms, it builds on the digital leadership discourse by proposing technical self-efficacy as a mediating construct that explains the difference in how different employees respond to digital transformation initiatives. Organizations should, therefore, adopt an integrated leadership development approach that improves adaptive leadership competencies as well as digital leadership practices that facilitate technical self-efficacy to achieve improved long-term employee performance.