The Impact of Transformational Leadership (TL) on Innovation Climate (IL) in Enterprises: Examining the Mediating Influence of Demographic and Organizational Factors (DOF)

In a knowledge-based and highly competitive global economy, fostering an innovation climate (IL) is essential for organizational resilience and sustainable performance. This study investigates the influence of transformational leadership (TL) on IL, with particular attention to the mediating role of demographic and organizational factors (DOF). Drawing on transformational leadership theory, the proposed model incorporates four TL dimensions - idealized influence, inspirational motivation, intellectual stimulation, and individualized consideration - and examines their effects on IL across different contextual conditions. Data were collected from 328 small and medium-sized enterprises (SMEs) in Hanoi and surrounding provinces between April and June 2025. Using validated measurement instruments and Partial Least Squares Structural Equation Modeling (PLS-SEM), the results demonstrate a significant positive effect of TL on IL (β = 0.512, p < 0.001), with inspirational motivation and idealized influence emerging as the strongest predictors. Mediation analysis indicates that education level, managerial position, tenure, and firm size strengthen this relationship, while industry differences partially attenuate it. The findings contribute to leadership and innovation literature by highlighting the context-dependent effectiveness of transformational leadership in SMEs in Viet Nam.