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Digitalization Effect on Business Performance: Role of Business Model Innovation

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  • Zhaozhi Wang

    (School of Economics, Fujian Normal University, Fuzhou 350117, China
    Department of Management, Concord University College, Fujian Normal University, Fuzhou 350108, China)

  • Shoufu Lin

    (School of Economics, Fujian Normal University, Fuzhou 350117, China)

  • Yang Chen

    (School of Economics, Fujian Normal University, Fuzhou 350117, China)

  • Oleksii Lyulyov

    (Department of Marketing, Sumy State University, 40007 Sumy, Ukraine
    Department of Applied Management, WSB University in Dabrowa Gornicza, 41300 Dabrowa Gornicza, Poland)

  • Tetyana Pimonenko

    (Department of Marketing, Sumy State University, 40007 Sumy, Ukraine
    Department of Applied Management, WSB University in Dabrowa Gornicza, 41300 Dabrowa Gornicza, Poland)

Abstract

Digitalization has become a key driver of business innovation in recent years. It provides businesses with new opportunities to innovate and create value. Digital technologies, such as cloud computing, big data analytics, and artificial intelligence, have helped businesses boost the development of new products and services, optimize their operations, and improve customer engagement. This study aimed to analyze the impact of digitalization on business performance within business innovation. This study applied an ordinary least square regression model and an intermediary to explore relationship in the chain of digital capability–business model innovation–company performance. The object of investigation was 1663 listed A-share companies Shanghai and Shenzhen in the software and information technology service sectors. The results showed that digital capabilities could be divided into three dimensions according to the hierarchical relationship: (1) basic digital capabilities, (2) digital operation capabilities, and (3) digital integration capabilities, all of which significantly positively affected enterprise performance. Furthermore, while business model innovation significantly positively affected corporate performance, it was also driven by the preceding variables of digital capabilities. Business model innovation enhanced the positive impact of basic digital capabilities, digital operation capabilities, and digital integration capabilities on company’s performance. Considering the empirical results, this study underlines that the government should promote digital skills development, create supportive regulatory environments, promote access to funding for innovations, foster partnerships between businesses and technology providers, and promote collaboration between businesses, which are conducive to extending digitalization within the business innovation model and improving business performance.

Suggested Citation

  • Zhaozhi Wang & Shoufu Lin & Yang Chen & Oleksii Lyulyov & Tetyana Pimonenko, 2023. "Digitalization Effect on Business Performance: Role of Business Model Innovation," Sustainability, MDPI, vol. 15(11), pages 1-19, June.
    • Handle: RePEc:gam:jsusta:v:15:y:2023:i:11:p:9020-:d:1162865
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    3. Xin Xie & Shaokang Wu & Ghulam Subhani & Sakina, 2025. "Analyzing how digital orientation contributes to organizational innovation and environmental, social and governance performance through digital inclusion and capabilities," International Entrepreneurship and Management Journal, Springer, vol. 21(1), pages 1-22, December.
    4. Nurul S. Samsuden & Umar H. A. Kohar & Saleh F. A. Khatib & Alhamzah F. Abbas, 2024. "Digital Capabilities and Business Performance: A Systematic Literature Review," Sustainability, MDPI, vol. 16(24), pages 1-23, December.
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    7. Iryna Nyenno & Vyacheslav Truba & Liudmyla Tokarchuk, 2023. "Managerial Future of the Artificial Intelligence," Virtual Economics, The London Academy of Science and Business, vol. 6(2), pages 72-88, June.
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    9. Samsuden N.S & Zulkarnaini N.A.S & Shah Rollah Abdul Wahab & Shahrial Bungsu, 2025. "Digital Capabilities and Product Innovation: A Strategic Nexus for Market Success," International Journal of Research and Innovation in Social Science, International Journal of Research and Innovation in Social Science (IJRISS), vol. 9(4), pages 1510-1530, April.
    10. Renpu Liu & Mengchen Xie & Yu Li, 2025. "How Does Digital Transformation Drive Green Innovation? The Key Roles of Green Dynamic Capabilities and Environmental Munificence," Sustainability, MDPI, vol. 17(19), pages 1-28, October.
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