Abstarct: The present study aimed to examine the impact of digital transformation and financial support through the banking system and the capital market on corporate innovation in Iran. This research is of a correlational type and, in terms of purpose, falls within applied research. The statistical population included 115 active companies listed on the stock exchange during 2019–2024, and the analyses were conducted using panel regression models. Data analysis was performed using EViews version 13. The findings indicated that bank financial support has a positive and significant effect on innovation and serves as the most important financial driver of corporate innovation. In contrast, capital market support showed a weak and negative effect on innovation, suggesting that short-term shareholder pressures may constrain innovative activities. Tobin’s Q and financial leverage also had significant negative effects on innovation, indicating that firms with higher debt or market value, due to conservatism or resource constraints, are less likely to engage in innovative activities. Digital transformation did not have a significant direct effect, although its indirect and long-term effects are plausible. Firm size and age showed no significant direct impact on innovation. Overall, the findings highlight the importance of managing financial resources and developing digital capabilities to enhance innovation and improve corporate competitiveness.