This study explores a critical paradox in digital transformation (DX). Using data from 4,000 Korean manufacturing firms, we examine how the complementary adoption of digital technologies across the data value chain affects product innovation and external knowledge assimilation. The empirical results indicate that the integrated digital systems enhance innovation but also create greater costs and structural barriers that dilute the benefits of DX. Specifically, the premised synergies of combining multiple technologies are often diminished because the sheer complexity of managing tightly interconnected systems increases internal coordination costs. This results in a combined effect that is less than the sum of its components. In addition, as these internal systems become increasingly sophisticated and aligned for efficiency, they act as strict filters against external knowledge. This dual nature of DX, which fosters an introverted innovator, arises from the system's structure rather than from resource constraints. The findings extend the dynamic capabilities literature by demonstrating that achieving sustainable competitiveness in DX environments requires navigating a delicate balance between internal technological alignment and external knowledge flexibility.
Kim et al. (Wed,) studied this question.