Unlocking the synergistic effect of technological innovation and resource orchestration on twin transitions: Implications for firm performance in Southeast Asia enterprises

The escalating climate crisis necessitates the urgent integration of green and digital transformations within Southeast Asian small and medium manufacturing firms. These firms are crucial to the region's economic landscape, yet they face systemic barriers that hinder the adoption of sustainable practices. While much of the existing literature has focused on macro-level policy frameworks, a significant gap exists in understanding how these “ twin transition ” are operationalized at the organizational level, particularly in resource-constrained settings. This study addresses this gap by analyzing data from 1964 manufacturing firms from the World Bank Enterprises Survey. It examines the impact of technological innovations, specifically product and process innovations, alongside resource orchestration on the successful implementation of these transitions and their effects on firm performance. The findings indicate that process innovation is a key enabler of digital adoption, while product innovation significantly enhances environmental sustainability. Firms that effectively integrate both transitions demonstrate improved performance compared to those pursuing them separately. Strong resource orchestration is also identified as a critical moderator that amplifies these benefits. However, the research also highlights contextual challenges, revealing that inadequate institutional support can lead to unintended setbacks, underscoring the need for localized strategies. This study provides valuable insights for policymakers and practitioners aiming to enhance resilience and competitiveness in the manufacturing sector.