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Based on the digital transformation practice of Chinese manufacturing enterprises, this paper sorts out the intrinsic mechanism of digital transformation affecting the performance of manufacturing enterprises systematically, based on the perspective of digital investment, and empirically tests the theoretical hypothesis using an unbalanced panel of China’s A-share listed manufacturing companies in Shanghai and Shenzhen from 2007 to 2020. The findings show that digital transformation enhances manufacturing firm performance significantly, and the conclusions still hold after using dynamic panel models, the instrumental variables approach, and a series of robustness tests; further analysis reveals that this effect is more significant in state-owned enterprises and manufacturing enterprises in regions with a higher degree of marketization. The results of the mediating effect model show that low-cost empowerment and innovation empowerment are important channels to improve the performance of manufacturing enterprises. Accordingly, this paper argues that accelerating the deep integration of digital technology and enterprise development is the key to achieving high-quality development and improving enterprise performance in the context of an uncertain business environment.
Wang et al. (Wed,) studied this question.