Digital transformation and innovation performance of China's manufacturers? A configurational approach

Abstract

Amidst the swiftly changing landscape and the surge of the digital revolution, the matter of digital transformation's impact on firms' innovation performance has sparked intense debates. In a bid to facilitate the evolution and advancement of traditional manufacturers towards high-quality development, this paper endeavors to tackle this issue by integrating the Technology, Organization, and Environment (TOE) framework with the Co-evolution Theory. Through an exploration involving 287 China's manufacturers, employing the Fuzzy Set Qualitative Comparative Analysis (fsQCA) technique, we strive to unearth avenues for enhancing manufacturers' innovation performance while accounting for variables such as digital transformation, dual innovation, firm size, slack resources, and network embeddedness. Our empirical findings reveal that digital transformation, dual innovation, firm size, slack resources, and network embeddedness are not standalone prerequisites for manufacturers to achieve exceptional innovation performance. Instead, achieving such performance hinges on the dynamic synchronization and collaboration among these factors. This underscores three effective routes to attaining heightened levels of innovation performance in manufacturers—namely, the balanced TOE path, the technology-driven path, and the resource-driven path. Digital transformation emerges as a crucial element in the first two paths. Moreover, manufacturers must diligently assess the adaptability of their degree of digital transformation alongside their capabilities and resources. These findings enrich the scope of the Co-evolution Theory and the TOE framework, elucidate the nonlinear correlation between digital transformation and innovation performance, and offer the manufacturers fresh avenues for augmenting their innovation endeavors.