Institutional and Digital Pathways to Sustainable Performance: The Roles of AI Capability, Strategic Flexibility, and Green Technology Adoption

Digital transformation is increasingly associated with sustainable business development, yet its relationship with sustainable performance may depend on firm capabilities and policy support. Drawing on the Resource-based View and the Technology–Organization–Environment framework, this study examines how government policy support and digital transformation are related to sustainable performance through artificial intelligence capability, strategic flexibility, and green technology adoption. Survey data from 523 firms in Vietnam were analyzed using partial least squares structural equation modeling. The results show that government policy support is positively associated with artificial intelligence capability, green technology adoption, and sustainable performance. Digital transformation is positively associated with artificial intelligence capability and strategic flexibility, both of which are related to sustainable performance, while its direct relationship with sustainable performance is not significant. The findings indicate distinct institutional and technological pathways to sustainable performance in an emerging economy.