Enterprise digitalisation and financial performance: the moderating role of dynamic capability

ABSTRACT

Digitalisation exerts a large influence on enterprise value creation. We identify four dimensions for measuring digitalisation at the enterprise level, i.e. value-chain digitalisation, business-process digitalisation, product-service digitalisation, and application of digital technology. Through the survey of 262 Chinese enterprises, we empirically find that there is an inverted U-shaped relationship between enterprise digitalisation and financial performance. And this relation is positively moderated by dynamic capability. Our results contribute to the literature on digitalisation at the micro enterprise level, and deeply explain the phenomenon of digitalisation paradox.

KEYWORDS:

• Enterprise digitalisation
• financial performance
• dynamic capability

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This project supported by the National Social Science Foundation of China [grant number 20BGL008].

Notes on contributors

Feifei Yu

Feifei Yu is an Associate Professor of Strategic Management and Innovation at Business School of Hohai University. In her research, she focuses on open innovation, SMEs technological innovation and digital transformation. Most recent projects deal with the effect of digital technology on the enterprise innovation activities. Her research has appeared in journals such as Energy Policy, Journal of Cleaner Production and Bulletin of Economic Research.

Dong Jiang

Dong Jiang is a graduate student at the Business School of Hohai University. His research lies in digital innovation and the firm’s digital transformation.

Yu Zhang

Yu Zhang is an Assistant Professor in the Business School of Hohai University. In her research, she focuses on marketing innovation and innovation management. Her research has appeared in journals such as Journal of business research, Journal of business & industrial marketing.

Hongyan Du

HongYan Du earned her master’s degree at Business School of Hohai University. Her research lies in digitalisation at the enterprises level, and the requirements on the organisational conditions.