How digital platform capability affects the innovation performance of SMEs—Evidence from China

Abstract

Today, more and more enterprises are achieving co-innovation across borders by joining digital platforms. However, many SMEs face difficulties in developing and benefiting from strong digital platform capability (DPC) due to limited experience, resources, and funds, which hinders innovation opportunities. This study constructs a model to explore how SMEs can enhance their innovation performance (IP) by adopting digital platforms based on resource orchestration theory. We then introduce ecological institutional norms (EIN) as the moderating variable to observe whether effective platform governance impacts enterprises' value co–creation (VCC) and IP. We conduct a questionnaire survey on 346 SMEs in China's manufacturing industry that participate in digital platforms, and the regression analysis and the bootstrap test results indicate that (1) DPC has a significantly positive impact on IP; (2) DPC has a significantly positive impact on VCC; (3) VCC partially mediates DPC and IP; (4) EIN positively moderate the relationship between DPC and VCC and positively moderate the mediating effect of VCC. These findings add to the literature on digital platforms theoretically and fill the gap in research on how participation in digital platforms can enhance enterprises' innovation and development from the perspective of SMEs. Finally, the study has important managerial implications for SMEs to cultivate DPC, carry out VCC, and participate in platform governance.