Digital transformation as a catalyst for enhancing business agility in the service sector

The mediating roles of business performance and competitive advantage

Authors

DOI:

https://doi.org/10.32674/7nvdmw20

Keywords:

Business agility, business performance, competitive advantage, digital transformation, service sector

Abstract

Grounded in Dynamic Capabilities and Resource-Based View (RBV) theory, this study explores how digital transformation influences business agility in the service sector through the mediating effects of business performance and competitive advantage. To test the hypothesized model, cross-sectional data were purposively collected from 394 respondents across five diverse service sectors (i.e., education, Healthcare, Bank and Financial Institutions, Hospitality, and IT) operating in the Kathmandu Valley. The data were analyzed using SmartPLS 4.0.  The findings indicate that digital transformation, business performance, and competitive advantage are significant predictors of business agility. Further, business performance and competitive advantage mediated the interplay between digital transformation and business agility. This study advances the digital transformation study by integrating strategic management principles to explain business agility drivers, emphasizing technology, talent, customer focus, and policy support to strengthen competitiveness in the service sector.

Author Biographies

  • Ujjwal Bhattarai , Kathmandu Model College

    Ujjwal Bhattarai is a Research Associate at the Research Management Cell of Kathmandu Model College (KMC), affiliated with Tribhuvan University. He is an M.Phil. Scholar at the School of Management, Kathmandu University. His major research interests lie in the areas of future work, agility, organizational behavior, human performance, workforce development, and inclusion.

  • Arhan Sthapit, Nepal Open University, Nepal

    Prof. Dr. Sthapit is a Professor and former Dean of the Faculty of Management and Law at Nepal Open University, Lalitpur, Nepal. With 14 years of university teaching and 22.5 years of industry experience, he is a practitioner-turned-academician. Dr. Sthapit has published 109 papers, mostly as a single/principal author, in peer-reviewed journals (including those Scopus-indexed/Scimago-ranked) published in different countries. Prof. Sthapit has served as a mentor to many management academics and has supervised over 151 master’s theses and more than a dozen MPhil and PhD dissertations. His areas of interest include strategic management, strategic HR and HRD, CSR, and global marketing.

  • Baburam Timsina, Tribhuvan University

    Baburam Timsina, Assistant Professor Baburam Timsina is a PhD Scholar at Tribhuvan University specializing in higher education leadership and organizational research. His scholarship examines university choice behavior, service quality, leadership, psychological empowerment, employee engagement, and job satisfaction using rigorous quantitative and mixed-method designs. His work advances theory-informed, evidence-based insights relevant to higher education management in emerging economies, linking scholarly inquiry with institutional and organizational development.

  • Oshin Gurung, Kathmandu Model College

    Oshin Gurung is a lecturer and research professional with an MBA degree. She works as a Research Assistant providing editorial assistance to academic journals and supporting research quality assurance. Her research interests include emotional intelligence, organizational behavior and performance, human resources development, workplace well-being, and ethics, with a strong focus on applied and policy-oriented research.

Additional Files

Published

2026-05-26

Issue

Vol. 19 (2026): American Journal of STEM Education

Section

STEM Education (regular)

License

Copyright (c) 2026 Mr., Prof. Dr., Assistant Professor, Miss

Creative Commons License

This work is licensed under a Creative Commons Attribution 4.0 International License.

Copyright (c) [year] [author]
This work is licensed under a Creative Commons Attribution 4.0 International License.
This license permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited. https://creativecommons.org/licenses/by/4.0

How to Cite

Bhattarai , U. ., Sthapit, A., Timsina, B., & Gurung, O. . (2026). Digital transformation as a catalyst for enhancing business agility in the service sector: The mediating roles of business performance and competitive advantage. American Journal of STEM Education, 19, 152-186. https://doi.org/10.32674/7nvdmw20