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Digital Technology Deployment and Improved Corporate Performance: Evidence from the Manufacturing Sector in China

Year: 2025

Type: article

Abstract: With global supply chains being reshaped and costs surging, China’s manufacturing sector faces mounting pressure to retain its position as the world’s largest manufacturing center. Meeting this challenge demands the full mobilization of digital factors, which has attracted increasing academic attention. However, limited research has examined how the effective integration of digital factors with traditional production factors can improve corporate performance. With data on Chinese manufacturing enterprises from the A-share market, this study employs a fixed effect model and a mediating effect model to analyze how the synergies between digital and traditional factors enhance corporate performance. Further, it illustrates the heterogeneous impacts across different types of enterprises. The results reveal three key findings. First, the synergies between digital and traditional factors significantly enhance corporate performance, with digital–capital synergy proving more effective than digital–labor synergy. Second, this synergy promotes performance improvement through three primary mechanisms: strengthening internal control quality, fostering business model innovation, and increasing product differentiation. Third, the performance effects of multi-factor synergies vary considerably across enterprise types, being more pronounced in non-state-owned enterprises, firms with strong digital attributes, and firms without political connections. Overall, this study offers valuable insights for manufacturing firms seeking a competitive edge in high-end and intelligent manufacturing within an increasingly globalized competitive landscape.

Source: Information

DOI: 10.3390/info16090781

Authors: Liwen Cheng, Rui Ma, Xihui Chen, Luca Esposito

Institutions: Zhejiang Shuren University, Zhejiang University of Technology, University of Foggia

Language: English

Topic: Digital Economy and Transformation

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Industry, innovation and infrastructure, Decent work and economic growth

Open Access status: gold

Estimated APC paid: $1,930