Abstract: In the digital economy era, how executives’ cognition drives business model innovation to achieve value-added products and services remains both a theoretical and practical challenge. This study, using 2022 ChiNext data from listed companies, empirically examines the issue through the lenses of Upper Echelons Theory and Dynamic Capabilities Theory. The findings reveal that: (1) Executives’ digital economy cognition level and cognitive uniqueness bear significantly positive influence on business model innovation; (2) Dynamic capabilities fully mediate the relationship between executives’ cognition level and business model innovation, while partially mediating the link between cognitive uniqueness and innovation; (3) Regional digitalization levels positively moderate the relationships between executives’ cognition level, cognitive uniqueness, and dynamic capabilities. These results elucidate the nature and patterns of business model innovation from cognitive and capability perspectives. To innovate business models in the digital economy context, effective measures should be adopted: At the firm level, we should enhance executives’ awareness and belief systems regarding business model innovation; at the governmental level, we should strengthen digital infrastructure construction and formulate scientific, forward-looking digital economy policies in an attempt to improve regional digitalization levels.

Key words: digital economy, executive cognition, dynamic capabilities, business model innovation