The impact of digital leadership on innovative performance in Libyan commercial banks: The mediating role of digital maturity

Abstract

This study examines the relationship between digital leadership, digital maturity, and innovative performance within the context of Libyan commercial banks. Drawing on a resource-based (RBV) perspective and dynamic capability (DC) theory, the study addresses a central question: how does digital leadership translate into innovative performance, and is digital maturity a key organizational mechanism in this process? The study fills a contextual gap in emerging banking systems, particularly in Libya, where digital transformation initiatives are accelerating, while empirical evidence on leadership-driven digital capability development remains limited.

A structured questionnaire was developed, and data were collected from employees of the National Commercial Bank and Al Wahda Bank in Benghazi and Ajdabiya. Hypotheses were tested using partial least squares structural equation modeling (PLS-SEM). While the results revealed some estimates of direct relationships between digital leadership and innovative performance, they strongly and statistically supported the mediating role of digital maturity, highlighting the capability-building pathway through which digital leadership contributes to innovative performance. The model demonstrated high explanatory power and acceptable predictive significance. The study confirms that improving innovation performance in Libyan banks depends heavily on fostering leadership-driven digital capabilities. It provides guidance for bank executives and policymakers seeking to promote sustainable innovation through structured digital transformation strategies.