Abstract
Although scholars have tried to explain the relationship between digitalization and innovation, results are mixed from different perspectives. Building on the optimal distinctiveness theory, we explore how and when firms’ distinctiveness of digitalization affects innovation performance. We theorize that there is an inverted U-shaped relationship between the distinctiveness of digitalization and firms’ innovation performance, which can be strengthened by government subsidies and weakened by firms’ negative aspiration performance gap. We test the hypotheses using a panel dataset of 1871 listed firms in the manufacturing industry in China from 2011 to 2020. The empirical results support our hypotheses. Our study contributes to the research on optimal distinctiveness theory and innovation performance.
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