The relationships between digital capability, digital orientation, digital innovation and firm performance: a study on savings and credit cooperative societies (SACCOs)

Purpose The purpose of this study is to explore the effect of digital orientation (DO), digital capability (DC) and digital innovation (DI) on firm performance (FP) of Saving and Credit Cooperative Organizations (SACCOs), as well as the mediating effect of DI. This paper examines a new conceptual framework based on Dynamic Capabilities, Resource Based View, and Diffusion of Innovation theories perspectives. Design/methodology/approach Survey data were collected from 210 SACCOs in Uganda between July to September 2025. Structural equation modelling was used to examine the direct effects of DO, DC and DI on FP, as well a mediation analysis as to explore the mediating effect of DI on SACCO performance. Findings The results reveal that DO, DC and DI all have direct positive effects on FP. We also found that DI has a positive mediating effect from DO to firm performance, as well as DC to FP. Research limitations/implications Our conceptual model, with interactions, has provided a working method for testing the relationships between DO, DC and DI and their relationship to FP, while presenting an opportunity for replication, and generalization of such a model. From a practical perspective, our study provides valuable insight to SACCOs regarding digitalization and FP. Specifically, the combined effects of DC, DO and DI on the SACCO performance are higher than individually. Practical implications This study relies on data from a single industry, based in a developing country, that could limit the generalizability of our findings concerning firm size and geographical location. Future research could examine the conceptual model and study findings across other settings, such as banks or FinTechs. Originality/value These findings could be useful for scholars, managers and practitioners to clarify how DO and DC intermediated through DI affect the performance of SACCOs.