Entrepreneurial orientation and artificial intelligence adoption as drivers of digital transformation in manufacturing SMEs

The study explores the relationship between entrepreneurial orientation (EO) and digital transformation (DT) while considering the mediating effect of artificial intelligence adoption (AIA). Drawing on the resource-based view (RBV) and dynamic capability theory (DCT), we present findings from an analysis of 290 South Korean manufacturing small and medium-sized enterprises (SMEs). Our study indicates that while risk taking positively influences DT, innovativeness and proactiveness do not have a significant influence on it. In addition, AIA serves as a mediator between EO and DT. This study enriches theoretical understanding of EO and AI-enabled DT through the lens of RBV and DCT perspectives and provides practical guidance for entrepreneurs and policy makers seeking to foster DT in manufacturing SMEs. The partial least squares structural equation modeling and fuzzy-set qualitative comparative analysis (fsQCA) revealed robust findings. The fsQCA findings identify three distinct configurations of EO components to drive AIA and DT. The study is conducted in manufacturing SMEs in South Korea, which may limit the generalizability of the findings. © 2026 International Council for Small Business.