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Article

The Impact of Digital Leadership on Organizational Innovation in China’s Baijiu Industry: The Mediating Function of Employees’ Digital Capabilities

by
Huifang Liu
1,*,
Yang Du
2,
Yueqi Xu
1 and
Sijian Niu
3
1
School of Management, Sichuan University of Science & Engineering, Zigong 643002, China
2
Department of Global Business Graduate School, Kyonggi University, Suwon 16227, Republic of Korea
3
Human Resources and Social Security Bureau of Shengzhou City, Shaoxing 312400, China
*
Author to whom correspondence should be addressed.
Sustainability 2026, 18(12), 5967; https://doi.org/10.3390/su18125967
Submission received: 30 April 2026 / Revised: 29 May 2026 / Accepted: 31 May 2026 / Published: 11 June 2026
(This article belongs to the Special Issue Digital Governance and Digital Innovation for Sustainable Development)
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Abstract

Digital leadership, as a core organizational capability driving technological transformation, plays a pivotal role in the digitalization of traditional industries. Focusing on employees of Sichuan Baijiu enterprises in China and grounded in upper echelons theory, this study develops a theoretical framework in which digital leadership and organizational learning influence organizational innovation through the mediating mechanism of employees’ digital capabilities. Using survey data from 309 employees of Baijiu enterprises, we employ partial least squares structural equation modeling (PLS-SEM) to test our hypotheses. The empirical results reveal three key findings: (1) digital leadership positively affects organizational innovation by enhancing employees’ digital capabilities; (2) employees’ digital capabilities partially mediate the relationships between digital leadership and organizational innovation, as well as between organizational learning and innovation outcomes; and (3) these capabilities serve as a critical transmission channel that amplifies the effect of organizational learning on innovation, thereby forming a “learning–capability–innovation” chain. This study extends upper echelons theory to the digital transformation context of traditional manufacturing industries. By introducing employee-level digital capabilities as a key mediating variable, it provides both theoretical insights and practical implications for Baijiu enterprises and analogous traditional industries seeking to foster innovation through strengthening digital leadership, building learning-oriented organizations, and developing employees’ digital competencies.

1. Introduction

The pervasive integration of digital technologies, such as artificial intelligence and big data, under the paradigm of Industry 4.0 is fundamentally reconfiguring business models and serving as a primary catalyst for organizational innovation [1]. This transition demands that organizations evolve beyond mere technological adoption, towards systemic transformations in strategy, culture, and, notably, leadership [2]. Within this context, digital leadership has emerged as a critical driver for successful digital transformation. Defined as “the strategic ability to leverage digital technologies to empower organizations and achieve strategic goals” [3], it necessitates that leaders combine technological acuity with strategic foresight to articulate a digital vision, reallocate resources, and guide adaptive responses to dynamic environments [4,5]. Nevertheless, a salient challenge persists, particularly among Chinese enterprises: the widespread phenomenon of “lagging leadership,” wherein traditional leadership paradigms fail to align with the exigencies of digital scenarios [6]. Grounded in Upper Echelons Theory, which posits that top managers’ cognitive bases and values significantly shape organizational outcomes [7,8], digital leadership can reshape managerial decision-making logic through technological synergy and resource empowerment, thereby facilitating the strategic implementation of innovation [9]. This theoretical perspective provides a robust foundation for examining the “leadership-innovation” nexus. The Baijiu industry, which is deeply rooted in China’s traditional brewing heritage and is presently at a critical juncture of digital transformation, offers an ideal empirical context for this investigation. Unlike high-tech or financial sectors, the Baijiu industry is characterized by strong experience dependence, highly complex fermentation mechanisms, and long-cycle aging requirements. These distinctive features render it a theoretically illuminating case for examining how digital leadership operates in contexts where tacit knowledge and traditional craftsmanship remain difficult to fully digitalize.
The organizational management paradigm is undergoing structural change under the continued impact of the wave of digital transformation. Digital technology not only reconfigures business models and processes, but also places new demands on the roles of leaders and the skill sets of employees. Benitez et al. [10] suggest that digital leadership, as a new type of management capability, reshapes leaders’ decision-making logic and employees’ behavioral patterns through the medium of digital technology and becomes a key pivot connecting strategic goals and implementation. The core of this ability lies in the fact that leaders need to use digital platforms to achieve the dynamic allocation of organizational resources, the precise guidance of team behavior and the effective transmission of strategic intent. Wu et al. [11] further pointed out that, in digital transformation, leaders are the designers of the strategy, while employees are the main body of practice, and the efficiency of the synergy between the two directly determines whether the enterprise can cross the “digital divide”. However, the core contradiction faced by most organizations today is the significant disconnect between leaders’ digital strategic intentions and employees’ digital capabilities. How to bridge this gap through systematic mechanisms has become an urgent challenge in theory and practice.
From the lens of organizational learning, enterprises must continually engage in knowledge absorption and transformation to foster innovation and maintain competitiveness in volatile markets [12]. With the deep embedding of AI and big data, organizational learning is evolving from experience-based to data-driven, intelligent models [13]. In this evolution, enhancing employees’ digital capabilities acts as a vital “catalyst” for organizational knowledge conversion. Empirical work by Hanelt et al. [14] confirms that strengthened digital capabilities significantly boost the efficiency of this conversion process. Yet, extant research often disproportionately focuses on technology’s direct impact on learning, inadvertently marginalizing the formative roles of leadership and organizational learning in cultivating employee competencies. As Lin et al. [15] underscore, organizational innovation—the ultimate aim of digital transformation—relies on a coherent “strategy-capability-action” chain; leaders must establish an innovation-oriented strategic framework through digital leadership, while employees require commensurate digital capabilities to translate strategy into tangible innovative practices.
Although prior studies have established a positive correlation between digital leadership and organizational innovation [16], critical gaps remain regarding its underlying mechanisms. In practice, traditional manufacturing industries represented by Sichuan Baijiu enterprises commonly face the dual challenges of “lagging leadership” and insufficient employee digital capabilities, resulting in a failure to effectively translate digital investments into organizational innovation performance. First, the mediating role of employees’ digital capabilities remains inadequately explicated—specifically, precisely how digital leadership fosters enterprise innovation by enhancing the digital capabilities of Baijiu enterprise employees lacks robust quantitative validation. Second, the dynamic function of organizational learning within digital transformation requires further clarification. How Baijiu enterprises achieve a dynamic “learning-innovation” equilibrium through internal learning processes remains underexplored. To address these gaps, this study constructs an integrated framework linking digital leadership and organizational learning to organizational innovation, with employee digital capabilities as a central mediator. By doing so, it aims to elucidate the transmission mechanisms among these constructs and provide theoretical and practical insights for resolving the prevalent “strategy-capability disconnect” in digital transformation.

2. Literature Review

2.1. Digital Leadership

Driven by the increasing impact of technology on leadership, the phenomenon of digital leadership has attracted much attention and interest in organizational studies. The digital economy has led to many changes in the nature and performance of leadership among business managers, such as facilitating instant access to information [17], decision-making based on intelligent analysis of big data [18] and the formation of new types of leadership positions [19]. As an emerging leadership paradigm in the context of Industry 4.0 [20], the core of digital leadership is to help organizations accurately analyze changes in the external environment, quickly adapt and adjust their internal state, and then lead strategic change initiatives, which is a pivotal role in the strategic planning of an organization’s digital transformation [10,21]. Besson and Rowe’s [22] study insightfully reveals that the nature of digital transformation is a complex process involving multidimensional managerial change. They point out that mere investment in technology or resources is not enough to ensure the success of transformation; the key lies in the ability of managers to solve complex management problems, i.e., digital leadership. The essence of digital leadership lies in the organic fusion of traditional leadership with modern digital capabilities, aiming to make full use of the enabling role of technology with the ultimate goal of improving overall organizational performance [23].
The study of digital leadership is based on the top echelon theory proposed by Hambrick and Mason [7]. Digital leadership, as a competency construct, is defined as the effective use of digital technology to optimize the processes and outcomes of team or organizational management [24,25]. Digital leaders can utilize digital technology to access and integrate information resources, maintain relationships with members through communication and motivation, enhance team interaction and willingness to share, and achieve efficient processing and circulation of team information within the technological framework [26]. In addition, Mihardjo and Rukmana [16] scholars argue that digital leadership combines traditional leadership culture to maximize the use of digital technology to in-crease organizational value. The study of Xia et al. [27] confirms the positive impact of digital leadership of chief entrepreneurs on digital entrepreneurial success of entrepreneurial teams.

2.2. Organizational Learning

The theory of organizational learning was first introduced in the study of March et al. [2], which emphasized the need for organizations to learn in order to adapt to the changing external environment. Huber [28] defines organizational learning as the ability or process of maintaining and improving performance through knowledge acquisition, sharing and utilization. Argyris and Schon [29] viewed organizational learning from an action perspective as a process of continuous trial and error in which the organization adapts to external behavior. Therefore, organizational learning has been defined as a conscious activity of knowledge and information acquisition as well as sharing by the organization in order to influence the innovation performance, and its essence is the process of acquiring, sharing and applying knowledge and information in order to improve the competitiveness of the firm [30].
Organizational learning is a process of improving the quality of employees through the proliferation of knowledge and information to enhance the efficiency of the organization, and it is an ability that can enhance the competitive advantage of the enterprise and enable the enterprise to better adapt to the changing environment. Organizational learning is viewed as a process-based approach aimed at building an agile learning organization that focuses on keeping resources, capabilities, and environments aligned by emphasizing adoption, development, refactoring, transformation, and renewal [31]. Organizational learning in the context of digitalization is not only a behavior taken by enterprises to acquire external resources but also a process to introduce new thinking and integrate heterogeneous elements to create new value [32]. Organizational learning theory suggests that organizational learning is the driving force for enterprises to absorb and integrate internal and external knowledge, which can help them adapt to changes in the external environment and thus improve their competitiveness and facilitate their digital transformation [33,34]. The organizational learning capability of an enterprise determines the effectiveness of digital transformation to a certain extent and is a necessary condition for digital transformation.

2.3. Employee Digital Capabilities

With the continuous impact and disruption of digital power, the traditional perception of the quality and ability of practitioners in various industries, the way of thinking and management practices are facing profound changes. Digital innovation continues to evolve and change, and the required digital competency skills are also recognized to be changing [35]. Stone et al. [36] state that digital technologies construct a new type of digital distance between employees and organizations. In this context, there is an urgent call from the field of practice for the development of a new professional skill of deep integration of employees with digital technologies [37]. In order to meet this demand, employees need to possess a broader range of technological literacy, rational thinking, and the ability to acquire, process, produce, and apply information, which, as described by Thomas et al. [38], constitute the core elements of employee digital capabilities. Employee digital capabilities have emerged and are becoming indispensable for individuals to enter a new era defined primarily by digital productivity. These capabilities are primarily demonstrated through the application of information technology and the mastery and utilization of digital knowledge and skills.
The digital transformation of enterprises places employees in a digital work environment that requires certain digital competencies to better apply digital technologies [39]. Employees, as the core elements of the enterprise composition, the level of their digital competence is a key force in determining the success of the enterprise’s digital transformation [40]. The digital competence of enterprise employees refers to the comprehensive ability to collect, manage, analyze and express all kinds of information and data through the conscious use of digital technological tools and to innovatively solve practical problems at work. Digital competence covers not only the skills of using digital tools and technologies but also the ability to understand and apply digital information [41]. Xu [42] pointed out in his study that the digital skills of enterprise employees refer to the ability of enterprise employees to use digital technology to engage in digital labor.

2.4. Organizational Innovation

In the context of the digital economy, the strategic transformation of enterprises is not only reshaping business processes but also cutting through organizational innovation to promote the creation of new value [43]. Organizational innovation is defined as the adoption of concepts or behaviors that are new to the organization, either in the form of a new product or service, a new production process technology, a new structure or management system, or a new program or project that involves members of the organization [44,45]. Organizational innovation is the process by which an organization adopts new ideas or behaviors and transforms the new ideas into new or improved products, services, and technologies, and this behavior is an important means of enhancing firm performance and gaining competitive advantage in situations of technological change [46]. Organizations create competitive advantage by implementing innovations in new products or services, market expansion, production process improvement, and service quality enhancement [47]. This organizational innovation is specified in the adoption of new methods in the company’s business and external relations practices by updating the organizational systems, procedures, and practices, which in turn effectively improve the company’s performance [48]. To sum up, organizational innovation is a multi-dimensional, multi-stage and complex process, which requires organizations to continuously explore and try in multiple dimensions, such as technology, products, services, structure and management, in order to adapt to the changes in the external environment and to achieve the sustainable development of the organization and the continuous improvement of competitive ad-vantage.

3. Hypotheses Development

3.1. Digital Leadership and Employee Digital Capabilities

Digital leadership is one of the contemporary concepts that refers to the use of digital platforms to guide and influence the behavior of employees to achieve the strategic goals of an organization [3]. Leaders with digital leadership have a strong influence on their employees and are therefore more likely to be role models for their followers [49,50]. In the digital age, with a deeper understanding of technological developments, digital leaders have a critical impact on employee behavior within the constraints of available organizational resources [16]. Leadership influences organizational effectiveness through a dual path: optimizing affective coordination, synchronization of actions, and cognitive integration at the team level to enhance effectiveness and moderating member behavior at the individual level [51]. Digital leadership is based on combining leadership and digital competencies to influence followers in an organization and motivate them to achieve their strategic goals [52,53]. Corporate leaders with digital leadership actively facilitate the process of digital transformation, enhance the development of digital teams, and drive the application of digital technologies within the enterprise to accelerate its digital transformation efforts. Under the positive encouragement of these leaders, employees will be more proactive in adopting digital technologies in their work, thereby enhancing their individual digital innovation capabilities [54,55].
Hypothesis 1. 
Digital leadership positively impacts employee digital capabilities.

3.2. Organizational Learning and Employee Digital Capabilities

Organizational learning is the process of enhancing action through knowledge and perception in which individuals acquire appropriate personal, professional and social competencies from the organization [56]. The development of organizational learning can effectively improve the knowledge base and technical ability of the employees of the enterprise and, at the same time, may better stimulate the innovation ability of the employees, promote the improvement of the quality of the employees, and ultimately promote the healthy development of the enterprise [57]. Magesa and Jonathan [58] and others take an organizational capability perspective on employee digital literacy, arguing that an individual’s skills and knowledge about digital technologies are developed and shaped from his or her interactions with other employees within the organization, emphasizing the need for organizations to create digital employee transformation pathways that enable employees to cope with upheaval and continue to adapt to change. Zhao et al. [59] argued that, if an enterprise attaches importance to learning, encourages continuous innovation, and regards learning ability as a competitive advantage, in this strong learning atmosphere, employees will take the initiative to learn, strive to enhance their own qualities and abilities, and keep pace with the development of the organization.
Hypothesis 2. 
Organizational learning positively impacts employee digital capabilities.

3.3. Digital Leadership and Organizational Innovation

The ability of business managers is one of the important factors affecting organizational innovation [60]. In the era of digital economy, digital leadership has emerged as a new type of leadership, which can help business managers effectively respond to various changes in the digital environment. Bass [61] first introduced the concept of digital leadership, which is a social influence process mediated by information technology that leads to changes in attitudes, feelings, thinking, behaviors, and performance of individuals, teams, and organizations. Research has shown that digital leadership has a positive impact in promoting corporate innovation [62]. It not only enhances employee engagement, employee innovative behaviors, team creativity, and organizational innovative performance but also helps companies to develop scientific and reasonable digital transformation programs and enhance corporate business value through the use of digital technologies and tools [16]. A study by Wasono and Furinto [25] states that, in the age of disruption, companies can increase sustainable competitive advantage by strengthening digital leadership and revolutionizing operations.
Digital leadership is considered to be a fast, cross-level, team-oriented and collaborative leadership style that maintains a strong focus on organizational innovation [63]. One of the most important responsibilities of digital leaders in organizations is to lead sustainable innovation in the organizational structure by ensuring digital transformation [64]. Leadership significantly affects the continuum of innovation management, as revealed in past studies [65,66], and these findings are equally important in the digital age. Digital leadership is a factor that has a significant impact on innovation [25], and its characteristics such as active risk-taking, agility, and a strong ability to change and innovate can positively influence organizational innovation [67,68]. The role of digital leadership is not limited to facilitating the creation of new products and services, but also extends to the development of innovative management styles and work methods to improve organizational competitiveness and achieve strategic goals [16,25].
In addition, digital leadership is expected to promote digital upgrading and innovation across the industry, accelerate enterprise digital transformation and organizational innovation, create a favorable industrial environment for enterprise development, and contribute to organizational improvement and long-term development [67]. In summary, digital leadership plays a crucial role in enterprise management and is an important force in driving organizational innovation and development.
Hypothesis 3. 
Digital leadership positively impacts organizational innovation.

3.4. Organizational Learning and Organizational Innovation

With the rapid changes in digital technology, organizations not only need to be guided by digital leadership, but also need to maintain a sense of self-learning at all times. Through continuous learning of new technologies and knowledge, companies can improve their organizational adaptability and promote organizational change. Organizational learning plays a critical role in this process. Costa and Cabral [69] emphasized the importance of maximizing the utility of knowledge resources through organizational learning by constructing a conceptual model of “knowledge-learning-innovation-competitive advantage”. The relationship between organizational learning and innovation has received widespread attention [70], and research on the role of organizational learning in promoting innovation in firms has been increasing. Organizational learning not only brings new knowledge to firms but also helps firms better understand their internal and external environments, reduces business risks, and improves organizational innovation [71]. The study of Hung et al. [72] further indicated that organizational learning can effectively promote innovation. Li [73] verified the positive impact of organizational learning and innovation on firm performance and clarified the positive impact of organizational learning on innovation. On the basis of Lin & Huang [74], who explored the mechanism of organizational learning’s role in organizational innovation, Lu et al. [75] further used strategic learning as the independent variable and knowledge management process dimensions to explore its positive effect on organizational innovation with different mechanisms. This suggests that organizational learning plays a multidimensional role in enhancing corporate innovation. Aqeela and Victor [76], on the other hand, pointed out that organizational learning mediates between knowledge inertia and organizational innovation, further revealing the complex mechanism of organizational learning’s role in the innovation process. The emergence of organizational learning theory has led to a deeper and more efficient use of knowledge resources in organizations, proving that organizational learning has gradually become one of the most important supports to enhance the level of innovation. In the context of the rapid change in digital technology, enterprises should maintain the awareness of independent learning and continuously improve their adaptability, innovation and competitive advantage through organizational learning [77].
Hypothesis 4. 
Organizational learning positively impacts organizational innovation.

3.5. Employee Digital Capabilities and Organizational Innovation

Kanter [78] stated that individual creativity is an important variable that affects organizational innovation. In the era of digital economy, employees’ digital literacy has become a new element that affects the development of creativity and the improvement of innovation performance. Employees with higher digital literacy can more easily identify, digest new knowledge related to them and effectively use this new knowledge, which can help to improve innovation performance and thus promote the achievement of organizational goals [79].
Further, Cheng and Hsu [80] emphasized the importance of employee information literacy, arguing that employees with high information literacy can create more value for companies in the digital economy. This information literacy is not only reflected in the acquisition and understanding of new knowledge but also in the process of transforming knowledge into actual innovation capabilities. Furthermore, Mancha and Shankaranarayanan [81] suggest that experiential learning is crucial for the development of individuals in a digital context. Individuals need to continuously form, transform and shift their ways of thinking through experiential learning in order to adapt to the rapidly changing digital environment and to facilitate the generation of digital innovations. This experiential learning includes not only the mastery of new technologies and methods but also the process of trial and error, reflection and improvement in the digital environment. Therefore, individual creativity, personality traits, digital literacy, information literacy, and experiential learning are all important factors that influence organizational innovation. In the era of the digital economy, companies should focus on developing these competencies in their employees in order to drive continuous innovation and growth in their organizations.
Hypothesis 5. 
Employee digital capabilities positively impacts organizational innovation.

3.6. Mediating Effect of Employee Digital Capabilities

From the perspective of social information processing theory, organizational members adjust their attitudes and behaviors based on the cues and information released by digital leadership about the organization’s supportive and desired behaviors [62]. Business leaders with digital leadership, by using digital communication and digital social skills to communicate and interact efficiently with their employees, teams, or organizations, are able to lead others and teams to exercise digital thinking and promote the free development of employee awareness, which in turn enhances employees’ digital creativity [9]. In the study of Noruzy et al. [82], it is stated that organizational learning and knowledge management directly affect organizational innovation, which in turn has a direct effect on organizational performance.
Employee creativity, as one of the key drivers of corporate innovation, and its development in the digital environment is crucial for organizations [83]. In order to enhance employees’ digital creativity, from the employee level, the development of organizational learning plays an important role. Organizational learning can not only effectively improve the knowledge base and technical skills of employees in enterprises but also may better stimulate the innovation ability of employees, promote the overall improvement of employee quality, and ultimately promote the healthy development of the organization [9]. Meanwhile, organizational learning capability plays a key role in promoting the transformation and integration of knowledge within the organization. This process can not only effectively stimulate employees’ innovative awareness and innovative ability but also promote the integration and synergy between multiple departments, thus maximizing the innovative ability within the organization [84]. Therefore, by strengthening digital leadership and organizational learning capabilities, companies can effectively develop the digital capabilities of their employees in the digital environment, which in turn will drive continuous innovation and development of the organization.
Hypothesis 6a. 
Employee digital capabilities has a positive mediating effect between digital leadership and organizational innovation.
Hypothesis 6b. 
Employee digital capabilities has a positive mediating effect between organizational learning and organizational innovation.
Figure 1 presents the research model that combines the above hypotheses.

4. Research Design and Methodology

4.1. Data Collection

The digital economy is efficient, accurate and convenient and is penetrating all aspects of the liquor industry, prompting companies to change their operating model to meet the challenges. Digital transformation is a must for liquor companies to adapt to the digital era. Under the background of digitalization, liquor enterprises mostly focus on digital marketing but less research on the internal mechanism of driving digitalization. The purpose of this paper is to fill this gap and explore the intrinsic connection and causal logic of leadership, employee digital capabilities, organizational innovation and other core elements in liquor enterprises in the era of digital economy. Therefore, the employees of Sichuan liquor enterprises were selected as the survey respondents. In order to ensure a more comprehensive reflection of the real situation, this study conducted a four-month survey from November 2023 to February 2024 through on-site visits and emails. In addition, in order to further expand the number of questionnaires, this study also commissioned a professional intermediary company to conduct a questionnaire survey on the employees in the enterprises for a fee, and a series of ways to enhance the validity of the questionnaire were set up in the questionnaire answering process. To summarize, 400 questionnaires were distributed in the formal research of this study and, after excluding invalid questionnaires such as omission or carelessness in filling out the questionnaires, a total of 309 valid questionnaires were obtained, with an effective recovery rate of 77.25% Table 1 lists the characteristics of the sample.

4.2. Variable Measurement

The scales used in this study are those published in mainstream journals and modified to suit the purpose of the study. In order to ensure the orderly conduct of the study, the article uses a 7-point Likert scale to scientifically measure the variables involved in the study, with 1–7 representing a 7-point change from “strongly disagree” to “strongly agree”. The paper uses ex ante procedural controls to prevent common methodological bias and ex post statistical methods to test for common methodological bias.
Digital Leadership (DL). Our company’s leader (CEO) has the ability to set a digital blueprint; our company’s leaders have technical leadership skills; our company’s leadership sees digitization as a key factor in achieving competitive advantage; our company leaders can accurately assess the level of digital competence and digital skills within the company; our company’s leaders have the ability to increase employee awareness of digitalization [85,86,87].
Organizational learning (OL). Our organization encourages employees to attend training courses to gain new knowledge; our organization sees employee learning as an investment in knowledge creation; our organization encourages employees to store what they have learned; our organization has an extensive training process where employees can share knowledge; our company encourages employees to continue their education, which is good for the company [70,88].
Employee Digital Capabilities (EDC). We offer different trainings to enhance the digital expertise of our team members; digital skills are a key selection criterion for recruiting new players; our team members use all the digital services and products we offer; our team members have the necessary skills to further digitize our company; we actively discuss digital projects within the company, including failures and best practices [87,89,90].
Organizational Innovation (OI). In our company, employees are always looking for new ways to work; our company is committed to developing and implementing a new organizational structure; our company is innovative in its organizational operations; in our company, it is easy to introduce new technologies, products and services; it is easy to implement new rules and regulations in our company [44,91,92].

5. Data Analysis and Discussion of Results

This study was conducted by using Smart-PLS to analyze the reliability of the variables and to test the research model. PLS has advantages in terms of data distribution requirements, sample size, model identification conditions, etc., and is more applicable for causal prediction type of structural equations. Meanwhile, PLS path analysis is a multivariate analysis technique for testing structured models, and a PLS path model consists of two parts, the measurement model and the structural model. In this study, statistical analyses were performed using SPSS version 22 and Smart-PLS version 3.0.

5.1. Reliability and Validity Analysis

First, scale reliability and convergent validity were examined. There are several methods used to measure the validity, reliability, and internal consistency of structure use scales, the best known of which are Cronbach’s alpha, composite reliability (CR), and average variance extraction (AVE). Cronbach’s alpha is commonly used to measure composite reliability and internal consistency values. As can be seen from the results in Table 2, the standardized loading coefficients for all measurement question items were greater than 0.760, and the combined reliability (CR) for all variables was greater than 0.89, and the average variance extracted (AVE) was greater than 0.600. These results indicate that the measurement scales used in this paper have good reliability and convergent validity. The data results of each measurement scale are stable and reliable enough for subsequent analysis. To minimize the potential problem of common method bias, this study employed Harman’s single-factor test by entering all measurement items into an unrotated principal component factor analysis. The results showed that the first factor explained [21.512%] of the total variance, which is below the recommended threshold of 50% [93]. To further examine the issue of multicollinearity and to ensure the accuracy and reliability of the PLS-SEM model estimation, this study also applied the full collinearity test proposed by Kock (2015) to assess the inner variance inflation factor (VIF) within the structural model [94]. The results indicated that all VIF values were below the conservative threshold of 3.3, ranging from [1.852] to [2.844]. Taken together, these findings suggest that common method bias does not pose a serious concern in this study.
Fornell and Larcker’s [95] study indicated that AVE values should be higher than the correlation between variables. In this way, the discriminant validity between the scales can be ensured. As shown in Table 3, the correlation coefficient between the latent variables was less than the square root (diagonal) of the AVE value. Another method, Heterotrait-Monotrait Ratio (HTMT), showed HTMT proposed by Dijkstra and Henseler [96] and suggested that, if the HTMT value is higher than 0.90, it indicates poor discriminant validity. Gold et al. [97] and Teo et al. [98] also used HTMT less than 0.9 as an evaluation criterion, and Clark & Watson [99] and Kline [100] used a more stringent criterion, which should be less than 0.85. Therefore, it can be judged that the HTMT between all latent variables meets the requirements, and that there is a good differential validity between the variables. Results for discriminant validity between the variables are shown in Table 4.

5.2. Hypothesis Testing

The model and hypotheses were tested using structural equation modeling, as the values obtained satisfy the necessary conditions for the application of the model. Based on the literature, the bootstrap method was used and a sample size of 5000 was selected for modeling. For a better understanding of the model created, it is shown in Figure 2.
To assess the explanatory power of the structural model, the coefficient of determination (R2) was examined. R2 indicates the proportion of variance in an endogenous variable that is explained by its associated independent variables within the structural model. Following the guideline proposed by Hair (2014), an R2 value greater than 0.19 is considered acceptable, suggesting that a latent variable serves as a substantial source of variation in another latent variable [101].
To further evaluate the practical contribution of each independent variable, the effect size (f2) was calculated using Smart-PLS. f2 quantifies the local effect of an exogenous variable on an endogenous variable. f2 values of ≥0.02, ≥0.15, and ≥0.35 represent small, medium, and large effect sizes, respectively.
In addition, the predictive relevance of the structural model was assessed using Stone-Geisser’s Q2 via the blindfolding procedure. In PLS-SEM, a Q2 value greater than zero for a specific endogenous reflective construct indicates that the path model has satisfactory predictive relevance for that dependent construct, meaning that the model can accurately predict data not used in model estimation [102]. In this study, all endogenous constructs yielded Q2 values greater than zero, indicating that the exogenous variables demonstrate strong predictive relevance for all endogenous variables. The results are shown in Table 5.
As shown in Table 6, the path coefficient of the effect of digital leadership on employee digital capabilities is 0.221, the t-value is 3.461, which is greater than 1.96, and the p-value is 0.001, which is less than 0.05; therefore, digital leadership has a significant positive effect on employees’ digital competence, and H1 is valid. The path coefficient of the effect of organizational learning on employee digital capabilities is 0.367, the t-value is 5.859, which is greater than 1.96, and the p-value is 0.000, which is less than 0.05; therefore, there is a significant positive effect of organizational learning on employee digital capabilities and H2 holds. The path coefficient of the effect of employee digital capabilities on organizational innovation is 0.402, the t-value is 6.775, which is greater than 1.96, and the p-value is 0.000, which is less than 0.05; therefore, there is a significant positive effect of employees’ digital competence on organizational innovation and H3 holds true. The path coefficient of the effect of digital leadership on organizational innovation is 0.136, the t-value is 2.202, which is greater than 1.96, and the p-value is 0.028, which is less than 0.05; therefore, digital leadership has a significant positive effect on organizational innovation and H4 holds. The path coefficient of the effect of organizational learning on organizational innovation is 0.172, the t-value is 2.857, which is greater than 1.96, and the p-value is 0.004, which is less than 0.05; therefore, organizational learning has a significant positive effect on organizational innovation and H5 holds.
As shown in Table 7, the value of employee digital capabilities in mediating effect detection between digital leadership and organizational innovation is 0.089, the t-value is 3.020, which is greater than 1.96, and the p-value is 0.003, which is less than 0.05; therefore, H6a holds. The value of mediating effect test between employee digital capabilities in organizational learning and organizational innovation is 0.148, t-value is 4.378, which is greater than 1.96, and p-value is 0.000, which is less than 0.05; therefore, H6b holds. Furthermore, the 95% confidence interval did not contain zero. Moreover, the variance accounted for (VAF) values confirmed that H6a and H6bexhibited partial mediation effects [102].

6. Conclusions

6.1. Discussion and Implications

The rapid growth of the digital economy has forced companies to change their previous operating models to meet the challenges posed by digitization. Digital transformation is a must for business faces to cope with digitization. Companies should not only set long-term goals for their digital transformation strategy but also take into account the stability and innovation of their internal organization. For the Baijiu industry in particular, as a traditional Chinese brewing sector, digital transformation has become a critical pathway to optimize brewing processes, strengthen quality traceability, and enhance precision marketing capabilities in the context of rising consumption upgrades and intensifying market competition. Existing research on digitalization focuses mainly on the discussion of products, services, models, and processes, while the digitalization of organizations and their members is underestimated [86]. Using top echelon theory, this study explores the relationship between digital leadership and organizational innovation in the context of digitization. It enriches the research on digitization and digital leadership and strongly responds to the call from scholars such as Hesse [103] for more research on organizational digitization.
Research has shown that digital leadership has a positive impact on organizational innovation. This development can be explained by the upper echelon theory [7], which states that organizational outcomes are influenced by the characteristics of the organization’s managers. In the digital age, technology and digital tools play an increasingly important role in the execution of work, and digital leaders who are able to use digital technology are more likely to effectively lead their teams to success [85]. This paper enriches the research on the relationship between digital leadership and organizational innovation. Most of the existing research focuses on the impact of leadership multi-organizational innovation but, with the advent of the digital economy, traditional enterprises urgently need a kind of leadership that can leverage digital technology to help them quickly respond to market changes and organizational digital transformation if they want to take their place in the fierce market competition [83]. To this end, this paper focuses on digital leadership, a new type of leadership that is in line with the trend of the times, and strongly enhances the understanding of the role of digital leadership in the process of digital transformation of enterprises. Notably, for the Baijiu industry—a traditional Chinese brewing sector characterized by strong experience dependence, highly complex fermentation mechanisms, and a significant proportion of tacit knowledge—the role of digital leadership exhibits unique contextual features. In this study, employee digital capability was found to exert only a partial mediating effect. This finding precisely reflects the reality that, in the Baijiu brewing process, the sensory evaluation and experiential intuition of master brewers remain difficult to fully replace with digital tools. Consequently, the exercise of digital leadership in the Baijiu industry requires a greater emphasis on “human-machine collaboration” rather than a simplistic “machine substitution for humans” approach.
This study further elucidates the driving effect of digital leadership on employee digital capabilities, confirming that digital leadership, as a new development in leadership theory, constitutes an important antecedent influencing employees’ digital competence. Accordingly, it fills a gap in the existing literature concerning the relationship between the two constructs and provides empirical evidence to support subsequent in-depth research. At the level of management practice, enterprise managers should lead by example to continuously strengthen their own digital leadership while designing targeted digital capability training programs tailored to individual employee differences, thereby enhancing the overall digital literacy of the organization and facilitating digital talent transformation and organizational innovation. Notably, digital leadership not only helps accelerate corporate digital transformation and organizational innovation but also fosters a favorable industrial environment for the digital upgrading of the industry, promoting long-term organizational improvement and sustainable development. Furthermore, given the inherent long-cycle aging requirements of the Baijiu industry (often spanning three to five years or longer), the contribution of digital transformation to firm performance is more prominently manifested in indirect channels, such as marketing traceability and supply chain optimization, whereas the innovation benefits of digital transformation in the production process involve an extended time lag. Therefore, when advancing digital leadership development, Baijiu enterprises should prioritize the digital empowerment of marketing and supply chain management as strategic entry points, while maintaining sufficient strategic patience regarding the innovation returns from the brewing and production stages, thereby charting a clear course for the successful realization of digital transformation.
Organizational learning also has a positive impact relationship on employee digital capabilities and the innovative behavior of the organization. Focusing on organizational learning, according to the theoretical viewpoint of the resource-based viewpoint, the acquisition of knowledge and capability of enterprises relies on organizational learning, and this learning behavior plays an important role in the growth process of enterprises, and efficient organizational learning has an important role to play in promoting the improvement of the overall capability of enterprises and their mastery of environmental changes. Reuer et al. [104] believe that only by actively integrating internal and external resources while conducting open sharing of resources can we ensure that enterprises gain sustainable competitive advantage. By effectively carrying out organizational learning, it can help employees accumulate digital knowledge, strengthen the absorption, and then lay a good foundation for the enterprise to successfully realize digital transformation.
In the mediating effect test of employee digital capabilities, employee digital capabilities have a significant mediating effect between digital leadership and organizational innovation. Also, employee digital capabilities have a significant mediating effect between organizational learning and organizational innovation. Digital leadership, as a new requirement for traditional managers in the era of digital economy, as well as a new type of leadership that conforms to the development of the digital economy era, has an important role in promoting the process of enterprise digital transformation. To establish a digital team, enterprises should form a correct perception of the importance and necessity of digital transformation and make more efforts in the cultivation of relevant qualities and abilities to improve the level of digital quality of employees, so that they are more adaptable to the development trend and needs of digital transformation. Enterprises can take internal and external training, digital skills certification and other ways to improve the level of knowledge of employees’ digital skills. Enterprises should deeply understand the criticality and urgency of cultivating employees’ digital skills and accordingly design and implement an all-round and structured cultivation system and incentive mechanism to fully mobilize employees’ learning motivation and innovation potential, so as to take the lead in the surging wave of the digital economy, grasp the development opportunities, and ultimately drive enterprises to achieve sustainable prosperity and progress.

6.2. Limitations and Future Research

This paper makes some contributions on the mechanisms of digital leadership’s impact on organizational innovation, but the following shortcomings remain. First, based on the research questions and objectives, this paper considers digital leadership as a competency and employs a measurement tool developed by Zeike et al. to specifically measure digital leadership. Moreover, the measurement items for employee digital capabilities place excessive emphasis on tool operation skills while lacking coverage of digital cognition and data analytics. This paper explores the intrinsic mechanism of digital leadership and organizational learning on organizational innovation, and the mediating effect of employees’ digital competence, but there may be some other important mediating factors in the complex relationship between digital leadership and organizational innovation, and future research can try to cut from other theoretical perspectives to further explore the mechanism of digital leadership on organizational innovation. Finally, at the level of sample collection, the sample of this study focuses mainly on the employees of Baijiu enterprises. Currently, it is unknown whether these findings can be widely applied to other industries. Therefore, future research should broaden the data sources to cover more diversified industry sectors and compare and analyze these new findings with the results of this study in order to verify their general applicability.

Author Contributions

Conceptualization, H.L.; methodology and analysis, H.L. and Y.D.; writing—original draft preparation, H.L. and S.N.; writing—review and editing, H.L., S.N. and Y.X. All authors have read and agreed to the published version of the manuscript.

Funding

This research was funded by “Doctoral Fund Project of Sichuan University of Science and Engineering (No. 2023RC14)”. “A Project Supported by Research Center for Reform and Development of Newly Established Universities (No. XJYX2025B24)”.

Institutional Review Board Statement

Ethical review and approval were waived according to the local legislation and institutional requirements.

Informed Consent Statement

Informed consent was obtained from all subjects involved in the study.

Data Availability Statement

The raw data supporting the conclusions of this article will be made available by the authors on request.

Conflicts of Interest

The authors declare no conflicts of interest.

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Figure 1. Conceptual model.
Figure 1. Conceptual model.
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Figure 2. PLS test of the proposed structural model. *** p < 0.001; ** p < 0.01; * p < 0.05.
Figure 2. PLS test of the proposed structural model. *** p < 0.001; ** p < 0.01; * p < 0.05.
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Table 1. Characteristics of sample.
Table 1. Characteristics of sample.
DescriptionFrequencyPercent
Gendermale21268.6
female9731.4
AgeUnder 20 years old185.8
21 to 30 years old4915.9
31 to 40 years old7825.2
41 to 50 years old9229.8
Over 51 years old7223.3
EducationCollege education or below14045.3
Undergraduate course8025.9
master6420.7
doctoral258.1
PositionGeneral Employee11838.2
Grassroots Managers9330.1
Middle managers8326.9
senior management154.9
Total309100%
Table 2. Validity and reliability analysis.
Table 2. Validity and reliability analysis.
Observed VariableFactor
Loadings		VIF (<3)Cronbach’s αRho ACRAVE
Digital
Leadership
(DL)		DL10.8262.1910.8860.8890.9170.687
DL20.8412.284
DL30.8292.180
DL40.8211.997
DL50.8282.026
Organizational learning
(OL)		OL10.8792.7310.9110.9140.9330.737
OL20.8402.328
OL30.8432.434
OL40.8462.335
OL50.8822.844
Employee
Digital
Capabilities
(EDC)		EDC10.8232.0300.8550.8590.8960.634
EDC20.7781.888
EDC30.8372.178
EDC40.7681.852
EDC50.7731.890
Organizational Innovation
(OI)		OI10.8202.0840.9000.9020.9260.714
OI20.8582.356
OI30.8242.139
OI40.8592.551
OI50.8632.549
Table 3. Inter-construct correlations and shared variance.
Table 3. Inter-construct correlations and shared variance.
DLOLEDCOI
DL0.829
OL0.4850.858
EDC0.3990.4740.796
OI0.3800.4280.5370.845
Note: The bold elements on the diagonal represent the square roots of the average variance extracted (AVE), and the off-diagonal elements are the correlation estimates between constructs.
Table 4. HTMT values.
Table 4. HTMT values.
DLOLEDCOI
DL
OL0.537
EDC0.4560.538
OI0.4230.4700.606
Note: All HTMT values were below the threshold of 0.85 recommended by Dijkstra and Henseler (2015) [96], indicating the establishment of discriminant validity. Based on SmartPLS 3.0, with 5000 bootstrap resamples, N = 309.
Table 5. Coefficient of determination.
Table 5. Coefficient of determination.
R SquareR Square
Adjusted		F SquareQ Square
DL 0.0200.051
OL 0.0300.140
EDC0.2620.2570.181 0.163
OI0.3410.335 0.238
Table 6. Hypothesis verification results.
Table 6. Hypothesis verification results.
RelationshipOMSDt-Valuesp-ValuesResult
Direct EffectH1DL → EDC0.2210.2220.0643.4610.001Supported
H2OL → EDC0.3670.3700.0635.8590.000 ***Supported
H3EDC → OI0.4020.4040.0596.7750.000 ***Supported
H4DL → OI0.1360.1370.0622.2020.028Supported
H5OL → OI0.1720.1720.0602.8570.004Supported
*** p < 0.001.
Table 7. Results of mediation effect testing.
Table 7. Results of mediation effect testing.
Pathst-Valuesp-Values2.5%97.5%Decision
DL → EDC → OI0.0893.0090.0030.0360.149partial mediation
OL → EDC → OI0.1484.4620.0000.0920.219partial mediation
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MDPI and ACS Style

Liu, H.; Du, Y.; Xu, Y.; Niu, S. The Impact of Digital Leadership on Organizational Innovation in China’s Baijiu Industry: The Mediating Function of Employees’ Digital Capabilities. Sustainability 2026, 18, 5967. https://doi.org/10.3390/su18125967

AMA Style

Liu H, Du Y, Xu Y, Niu S. The Impact of Digital Leadership on Organizational Innovation in China’s Baijiu Industry: The Mediating Function of Employees’ Digital Capabilities. Sustainability. 2026; 18(12):5967. https://doi.org/10.3390/su18125967

Chicago/Turabian Style

Liu, Huifang, Yang Du, Yueqi Xu, and Sijian Niu. 2026. "The Impact of Digital Leadership on Organizational Innovation in China’s Baijiu Industry: The Mediating Function of Employees’ Digital Capabilities" Sustainability 18, no. 12: 5967. https://doi.org/10.3390/su18125967

APA Style

Liu, H., Du, Y., Xu, Y., & Niu, S. (2026). The Impact of Digital Leadership on Organizational Innovation in China’s Baijiu Industry: The Mediating Function of Employees’ Digital Capabilities. Sustainability, 18(12), 5967. https://doi.org/10.3390/su18125967

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