Exploring the Interplay Between Capital Structure, Information and Communication Technologies Adoption, and Business Innovation: A Mediation Model Analysis

Small and medium-sized enterprises often face challenges in accessing and utilizing information and communication technologies (ICT) and managing their capital structure effectively. This research aims to provide empirical evidence on the interplay between capital structure, innovation, and ICT adoption. Our model investigates whether capital structure decisions promote innovative actions and enhance understanding of ICT decisions. Moreover, we examine the mediating effect of ICT on the relationship between capital structure and innovation. The findings indicate a positive influence of capital structure on the adoption of ICT and innovation. The results also demonstrate that ICT adoption significantly impacts innovation. Furthermore, the adoption of ICT plays a partial mediating role in the relationship between capital structure and innovation. Thus, our study contributes to both theoretical and empirical implications.