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    Exploring the effect of digital transformation on firms’ innovation performance

    Li, S. and Gao, L. and Han, Chunjia and Gupta, B. and Alhalabi, W. and Almakdi, S. (2023) Exploring the effect of digital transformation on firms’ innovation performance. Journal of Innovation & Knowledge 8 (1), p. 100317. ISSN 2444-569X.

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    Abstract

    The influence of digital industry and firm digitization on enterprise innovation has emerged as a critical research topic. To assess the impact of digital transformation on enhancing innovation output, we propose a game model of two organisations investing in digital transformation, analyse the index of enterprise digitalization level with Python tools for text analysis, and employ a fixed effect model. The findings indicate that firm digitalization and the level of regional digital industry innovation can both promote firm innovation. However, the regional digital industry innovation level can have a negative moderating effect on the firm digitalization innovation effect. Furthermore, the impact of firm digitalization on innovation is more visible in digital-related service industries. In other industries, the regional digital industry innovation level has a greater impact on innovation promotion. Due to firms' free-riding tendency in technology adoption, this study shows that the higher the level of digital industrialization in the region where the firm is located, the lower the marginal innovation efficiency of the firm's digital investment. When the level of development of digital industrialization in the region where a firm is located is higher, the "competitive effect" improves the marginal innovation efficiency of firms in adjacent areas, implying that digital industrialization has a spatial spillover effect. The relevant robustness test further verifies the conclusion of the empirical analysis. As a result, the digital industry should be given more attention and financial support.

    Metadata

    Item Type: Article
    School: Birkbeck Faculties and Schools > Faculty of Business and Law > Birkbeck Business School
    Depositing User: Chunjia Han
    Date Deposited: 17 Mar 2023 16:35
    Last Modified: 02 Aug 2023 18:20
    URI: https://eprints.bbk.ac.uk/id/eprint/50835

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