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Does digital transformation propel innovation strategies? An empirical investigation based on machine learning and the dynamic GMM approach

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  • Tingqian Pu

    (Guizhou University of Commerce)

Abstract

In today’s digital landscape, the transformation through digital technologies is revolutionizing traditional business models and innovation practices. Numerous organizations are accelerating their digital transformation efforts to enhance manufacturing capabilities, operational efficiency, and competitive advantage. While the significant role of digital transformation in economic development has been widely recognized in academic literature, research exploring the complex interplay between digital transformation and innovation strategies remains limited. This study aims to explore this relationship by utilizing annual report data and patent information from Chinese listed companies over the period from 2012 to 2021. Our findings indicate that digital transformation has a positive impact on both R&D input strategies and innovation output strategies. Specifically, it increases firms’ propensity to invest in R&D activities, thereby increasing potential future innovation returns. Moreover, digital transformation bolsters both strategic and substantive innovation by leveraging digital capabilities for better resource integration. This paper significantly contributes to the existing literature on digital transformation and innovation strategies, offering valuable insights that can facilitate higher levels of digital transformation and promote high-quality economic development.

Suggested Citation

  • Tingqian Pu, 2025. "Does digital transformation propel innovation strategies? An empirical investigation based on machine learning and the dynamic GMM approach," E&M Economics and Management, Technical University of Liberec, Faculty of Economics, vol. 28(2), pages 81-96, June.
    • Handle: RePEc:bbl:journl:v:28:y:2025:i:2:p:81-96
    DOI: 10.15240/tul/001/2025-5-012
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    More about this item

    Keywords

    Digital transformation; innovation strategies; R&D change; R&D growth; substantive innovation; strategic innovation;
    All these keywords.

    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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