How digital transformation shapes the performance of manufacturing firms: a study of China

Xianli Kong, Lingfeng Chen, Wenchao Wang and Yang Liu

China Accounting and Finance Review, 2025, vol. 27, issue 5, 694-727

Abstract: PurposeThis study examines how digital transformation affects the operational performance of Chinese manufacturing firms, with a focus on multidimensional impact mechanisms.Design/methodology/approachUsing the “Technology-Organization-External Network” framework, we analyze a dataset from 2,346 listed Chinese manufacturing firms (2011–2021) to empirically test the impact of digital transformation on operational performance.FindingsDigital transformation significantly improves manufacturing enterprises’ performance by enhancing innovation effectiveness, boosting labor productivity, increasing organizational management efficiency, reducing supply chain dependence and strengthening capital market recognition. The transformation’s effect evolves from negative to positive over time, emphasizing the need for sustained investment.Originality/valueThis study innovatively proposes the “Technology-Organization-External Network” framework to reveal the multidimensional mechanisms. It further validates the long-term benefits of digital transformation and highlights the importance of external conditions such as digital infrastructure, financial development and industry competition intensity.

Keywords: Digital transformation; Corporate operational performance; Innovation effectiveness; Labor productivity; Supply chain concentration (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eme:cafrpp:cafr-10-2024-0169

DOI: 10.1108/CAFR-10-2024-0169

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