Technology adoption drives entrepreneurial performance through integrated PEST factors supporting sustainable economic growth and innovation

Abstract

Entrepreneurial performance in emerging economies is shaped not only by macro-environmental conditions but also by entrepreneurs’ ability to adopt and leverage digital technologies. However, empirical research remains limited in explaining how political, economic, social, and technological (PEST) factors translate into entrepreneurial outcomes through technology adoption. This study examines the associations between PEST conditions on entrepreneurial performance in Jordan and examines the mediating role of technology adoption, aligning the analysis with Sustainable Development Goal (SDG) 8 and SDG 9. A quantitative cross-sectional design was employed using survey data collected from 293 entrepreneurs and SME owners. Partial least squares structural equation modelling (PLS-SEM) was applied to assess the measurement and structural models, test mediation effects, and evaluate predictive power, complemented by importance–performance map analysis (IPMA) to derive managerial insights. The results reveal that the social and technological factors have significant positive associations on entrepreneurial performance, both directly and indirectly, through technology adoption, whereas the political and economic factors failed to show any statistically significant impacts with the model used for the analysis. Technology adoption was emerged as an important predictor of entrepreneurial performance, highlighting the strategic importance of digital competence in relation to the environmental complexity. The findings of IPMA also indicate the importance of technology adoption and technological readiness to enhance performance. The results need to be treated with some caution, however, due to the moderate discriminant validity overlap found between some environmental constructs. This study provides a theoretical contribution by developing an integrated framework which connects PEST conditions with digital capability and entrepreneurial performance, as well as policy implications for fostering entrepreneurial competitiveness in digital and emergent economies.