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A study of digital transformation and MSMEs performance from a spatial perspective: Evidence from China

Author

Listed:
  • Zheng Bing

    (Economics Department School of Economics and Management Zhejiang, Sci-Tech University, Hangzhou, China)

  • Yuan Yuqing

    (Applied Statistics School Statistics Beijing Normal University, Beijing, China)

  • Li Huizhuan

    (Applied Statistics School Statistics Guangxi Normal University, Guilin, China)

  • Jiang Yihan

    (Economics Department School of Economics and Management Zhejiang Sci-Tech University, China)

Abstract

Aim/purpose – Not only have micro, small, and medium enterprises (MSMEs) been regarded as a driving force of the national economy, but they have also become important in promoting innovation and entrepreneurship. In general, today’s MSMEs face problems, such as high business costs, insufficient innovation, and inadequate management capabilities, that have all forced the digital transformation of MSMEs. However, in existing studies, the impact of digital transformation on performance is controversial, and the subjects are generally listed companies. In this paper, we have decided to use micro business survey data and analyze them from a spatial perspective to explore how MSMEs’ digital transformation plays a role in influencing performance and the path of its effect. Design/methodology/approach – We use a sampling method with a dual directory-regional sampling frame to investigate MSMEs in Ningbo City, Zhejiang Province, China and then delve into the impact of digital transformation on enterprise performance from a spatial perspective by the spatial weighted logit model. Findings – Hierarchical analysis shows that there is a large room for improvement in the Digital transformation of enterprises. The digitalization level of an enterprise has a positive impact on performance. While from a spatial perspective, the digitalization level of neighboring enterprises has a negative impact on the performance of the enterprise. Path analysis shows that the digital transformation of enterprises can increase innovation, reduce costs, and improve the performance of enterprises. Originality/value – We provide an empirical basis for vigorously promoting the digital transformation of enterprises, jointly building digital parks, and improving enterprise performance by reducing costs and improving efficiency. At the same time, it provides relevant suggestions for digital transformation for manufacturing MSMEs that are hesitant to see or are at a loss in the digital transformation and helps manufacturing MSMEs to achieve cost reduction and increase efficiency.

Suggested Citation

  • Zheng Bing & Yuan Yuqing & Li Huizhuan & Jiang Yihan, 2023. "A study of digital transformation and MSMEs performance from a spatial perspective: Evidence from China," Journal of Economics and Management, Paradigm, vol. 45(1), pages 319-343, January.
    • Handle: RePEc:vrs:jecman:v:45:y:2023:i:1:p:319-343:n:3
    DOI: 10.22367/jem.2023.45.13
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    References listed on IDEAS

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    1. Hess, Thomas & Matt, Christian & Benlian, Alexander & Wiesböck, Florian, 2016. "Options for Formulating a Digital Transformation Strategy," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 81032, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    2. Matarazzo, Michela & Penco, Lara & Profumo, Giorgia & Quaglia, Roberto, 2021. "Digital transformation and customer value creation in Made in Italy SMEs: A dynamic capabilities perspective," Journal of Business Research, Elsevier, vol. 123(C), pages 642-656.
    3. Hess, Thomas & Matt, Christian & Benlian, Alexander & Wiesböck, Florian, 2016. "Options for Formulating a Digital Transformation Strategy," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 82423, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
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    JEL classification:

    • C13 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Estimation: General
    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • M30 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - General
    • 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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