Dynamic Mechanism of Digital Transformation in Equipment Manufacturing Enterprises Based on Evolutionary Game Theory: Evidence from China

Abstract

The digital transformation of equipment manufacturing enterprises is a gradual process in which enterprises, governments, and consumers form stakeholders. The equipment manufacturing enterprise is the executive body of digital transformation, the government is the maker of subsidy policies, and consumers are the users of digital products. The impact of the tripartite relationship on the efficacy of digital transformation requires further investigation. This article applies evolutionary game theory to scrutinize the propelling mechanism behind digital transformation in manufacturing firms specializing in equipment production. The research results show that (1) the intensity of government subsidies significantly affects the transformation progress of equipment manufacturing enterprises; (2) the increase in consumer preference accelerates the evolution speed of enterprises’ choice of implementing digital transformation strategies; and (3) the equipment manufacturing industry needs to improve the flexibility and adaptability of enterprises through flexible production so it relies more on digital technology to enable production and management services. However, as a result of constraints in data gathering, there is inadequate data to back up the sensitivity analysis in the case analysis section, potentially resulting in inadequate argumentation. Based on game theory and the simulation results, combined with the case analysis, three policy recommendations were proposed to strengthen the construction of the digital infrastructure, establish a dynamic adjustment mechanism for subsidies, and build a collaborative digital ecosystem for development.