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Purpose This study aims to investigate how digital leadership influences frugal innovation in small and medium-sized enterprises (SMEs) in developing countries. Also, it will explore the mediating roles of knowledge sharing and the moderating role of digital organisational culture based on the relationship between digital leadership and frugal innovation. Design/methodology/approach This study used a quantitative approach, utilising a cross-sectional survey to collect data from 316 SMEs in Jordan. Findings The results of this study suggest that digital leadership enhances frugal innovation. Also, the results show that knowledge sharing significantly mediates the relationship between digital leadership and frugal innovation, whereas digital organisational culture positively moderates the relationship. Practical implications This study offers valuable insights and a refined approach for managers and directors of SMEs in developing and emerging countries. It highlights the importance of enhancing frugal innovation capabilities by adopting digital leadership practices, encouraging knowledge sharing and nurturing a dynamic digital culture within their organisations. Originality/value This study adds to the current body of knowledge by providing theoretical support for the idea and empirical evidence that digital leadership substantially impacts frugal innovation. Furthermore, the authors add to the body of knowledge on both subjects by demonstrating how knowledge sharing mediates the relationship between digital leadership and frugal innovation. The authors further argue that a digital organisational culture strengthens this relationship.
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