AI Adoption, Transformational Leadership, and Sustainable Performance in Higher Education: The Mediating Role of Innovation Capability

Abstract

Artificial Intelligence (AI) is increasingly reshaping higher education institutions, yet limited evidence exists regarding how AI Technology Adoption contributes to Sustainable Performance. This study examines the relationships among AI Technology Adoption, Transformational Leadership, Innovation Capability, and Sustainable Performance in higher education institutions. Drawing on the Technology-Organization-Environment (TOE) framework, Transformational Leadership Theory, Dynamic Capability Theory, and the Triple Bottom Line (TBL) perspective, a research model was tested using survey data collected from 500 academic and administrative staff across higher education institutions in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA) in China. Structural Equation Modelling (SEM) was employed to examine the proposed relationships. The findings reveal that AI Technology Adoption and Transformational Leadership exert positive effects on Sustainable Performance, both directly and indirectly through Innovation Capability. Innovation Capability was also found to partially mediate the relationships between AI Technology Adoption, Transformational Leadership, and Sustainable Performance. By positioning Sustainable Performance as a key institutional outcome, this study extends existing research on AI in higher education beyond technology implementation and demonstrates the role of Innovation Capability in translating technological and leadership resources into Sustainable Performance.