Green Digitalization Capability and Sustainable Energy Investment Efficiency: The Mediating Role of Energy Transition Readiness in Jordan’s Energy Sector

Abstract

This research analyses the impact of energy transition readiness (ETR) as a mediator between green digitalization capability (GDC) and sustainable energy investment efficiency (SEIE) in the energy sector in Jordan. This study in contrast to previous research that concentrated on corporate responsibility and reputational mechanisms proposes a new capability-based framework that is based on the emerging digital-energy nexus. The data were gathered in an online cross-sectional survey of 528 energy related companies such as renewable energy service providers, utilities, and energy technology services providing companies based in Jordan. The analysis uses Partial Least Squares Structural Equation Modeling (PLS-SEM) to provide a test of the suggested relationships. The results indicate that GDC does not have a direct significant impact on SEIE. Rather, a complete and substantial mediation of the relationship by ETR suggests a complete mediation effect. This implies that companies can only transform the GDC into the high efficiency of investment when sufficiently equipped to face energy transition processes, such as regulatory adaptation, technological integration, and sustainability alignment. It is theoretically based on the Dynamic Capabilities Theory (DCT), Institutional Theory, and the Resource-Based View (RBV), which expands the existing theories to the under-researched area of digital transformation and energy transition in new economies. The findings have a contribution to the energy economics literature in the form of new constructs (GDC and ETR) that provide a new analytical perspective on sustainable energy performance in the developing context. In practice, the results emphasize the importance of institutional support structures in Jordan, such as regulatory incentives and policies of integrating digital and energy, to improve the transition preparedness of firms. Managers are urged to invest in organizational abilities that can match the digital innovation to energy sustainability targets, such that long-term investment efficiency and competitiveness in the emerging energy market are maintained.