<p>This study examines the influence of transformational leadership on firm performance, mediated by dynamic capabilities and organizational innovation, among firms operating within Ethiopian industrial parks. The study used a quantitative approach with an explanatory research design, and data were collected from 308 management-level employees from firms in selected industrial parks in Ethiopia. Structural equation modeling (SEM) were employed to analyze and test the study hypotheses using SPSS AMOS v23. Findings, showed that transformational leadership significantly influence firm performance through simple and serial mediating effects using dynamic capabilities, and organizational innovation with (β = 0.047, p = 0.037; β = 0.076, p = 0.029; β = 0.014, p = 0.038 respectively), total indirect effect (β = 0.175, p = 0.004), and total effect (β = 0.396), and also the model explained 17.7% of the variance in firm performance (R² = 0.177), with a corresponding effect size of (f² = 0.083), indicating a small-to-medium contribution of transformational leadership to firm outcomes. This result showed that these factors partially mediate the relationship between transformational leadership and firm performance, with significant indirect effects noted, and support serial mediation pathways. Finally, findings highlight the influence of transformational leadership is to enhancing capabilities, and fostering innovation in order to improve firm performance, and indicate that performance can be improved by supporting initiatives that build managerial capabilities within industrial parks. In conclusion, future researchers are advised to investigate the relationship between transformational leadership and firm performance in different mediating and moderating mechanisms, and in different industry types in particular.</p>