Impact of AI-Based Digital Tools on the Performance of Women Entrepreneurs in Developing Economies: The Mediating Role of Entrepreneurial Self-Efficacy and Operational Efficiency and the Moderating Role of Digital Literacy

Abstract

The rapid advancement of artificial intelligence (AI) technologies has significantly transformed the entrepreneurial ecosystem, creating new opportunities for small and medium enterprises (SMEs) worldwide. In developing economies, AI-based digital tools provide women entrepreneurs with innovative solutions to overcome traditional barriers such as limited market access, resource constraints, and operational inefficiencies. Despite the growing adoption of digital technologies, limited research has explored the mechanisms through which AI-based tools influence the performance of women entrepreneurs. This paper examines how AI-powered digital tools can enhance the performance of women entrepreneurs in developing economies and the role of entrepreneurial self-efficacy and operational efficiency that mediate the relationship between them and the moderator role of digital literacy. The survey was a quantitative research design that included the survey of women who run SMEs. Partial Least Squares Structural Equation Modeling (PLS-SEM) was used to analyze the data. The results show that AI-based digital tools have a strong effect in improving the performance of women entrepreneurs because of their effects on decision making, productivity in operations and market reach. More so, the findings show that entrepreneurial self-efficacy and operational efficiency partly mediate the association between AI-based digital tools and entrepreneurial performance. It is also shown that the digital literacy influences this relationship significantly and enhances the positive effect of AI technologies on business performance. The results can be added to the existing literature on digital entrepreneurship and economic empowerment of women with a combination of technological, psychological, and operational approaches. The research also gives practical implications to policymakers, entrepreneurship support agencies, and technology providers who are interested in promoting the adoption of digital and enhancing the abilities of women entrepreneurs in third world economies.