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The Impact of Digital Capability on Manufacturing Company Performance

Author

Listed:
  • Xiaoli Wang

    (School of Economics and Management, Northwest University, Xi’an 710127, China)

  • Ying Gu

    (School of Economics and Management, Northwest University, Xi’an 710127, China)

  • Mahmood Ahmad

    (Business School, Shandong University of Technology, Zibo 255000, China)

  • Chaokai Xue

    (Business School, Shandong University of Technology, Zibo 255000, China)

Abstract

Digital capability is an advanced capability that manufacturing companies need for their digital and intelligent development. At present, the influence mechanism behind the impact of digital capability on manufacturing companies’ performance is still unclear and lacks quantitative analysis. Based on the dynamic capability view, we propose a research model to investigate digital capability, digital innovation, value co-creation, and company performance and conduct an empirical study based on questionnaire data from 209 digital manufacturing companies. The empirical results show that digital capability has a significant positive impact on company performance. The results further show that digital innovation mediates the effect of digital capability on performance within a company, while outside the company, value co-creation mediates the impact of digital capability on company performance. This research provides empirical support in favor of companies developing digital capabilities in the context of digital transformation and offers theoretical insight into the contradiction between the potential value of digital capability and companies’ practice.

Suggested Citation

  • Xiaoli Wang & Ying Gu & Mahmood Ahmad & Chaokai Xue, 2022. "The Impact of Digital Capability on Manufacturing Company Performance," Sustainability, MDPI, vol. 14(10), pages 1-24, May.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:10:p:6214-:d:819713
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    References listed on IDEAS

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    Cited by:

    1. Hongtao Wang & Wencheng Cao & Fei Wang, 2022. "Digital Transformation and Manufacturing Firm Performance: Evidence from China," Sustainability, MDPI, vol. 14(16), pages 1-18, August.
    2. Rahmani, Amir & Aboojafari, Roohallah & Bonyadi Naeini, Ali & Mashayekh, Javad, 2024. "Adoption of digital innovation for resource efficiency and sustainability in the metal industry," Resources Policy, Elsevier, vol. 90(C).
    3. Tianshun Ruan & Ying Gu & Xinhao Li & Rong Qu, 2022. "Research on the Practical Path of Resource-Based Enterprises to Improve Environmental Efficiency in Digital Transformation," Sustainability, MDPI, vol. 14(21), pages 1-17, October.
    4. Jaehwi Jeong & Donseung Choi & Jangsoon Kim, 2022. "When Digital Capabilities of MNC Subsidiaries Matters: The Moderating Effect of Subsidiary Autonomy in Korea," Sustainability, MDPI, vol. 14(22), pages 1-13, November.
    5. Wenjing Zu & Guoda Gu & Sihan Lei, 2022. "Does Digital Transformation in Manufacturing Affect Trade Imbalances? Evidence from US–China Trade," Sustainability, MDPI, vol. 14(14), pages 1-14, July.

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