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The impact of enterprise digital transformation on financial performance—Evidence from Mainland China manufacturing firms

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  • Li Yonghong
  • Shao Jie
  • Zhan Ge
  • Zhou Ru

Abstract

Focusing on digital transformation of manufacturing enterprises, this paper investigates the relationship between digital transformation and financial performance of manufacturing enterprises through descriptive statistical analysis, correlation analysis, multilayer linear regression analysis, and group testing of the impact of digital transformation stages on the financial performance of enterprises, taking listed manufacturing companies that implement digital transformation as a sample. The research results show that there is a significant positive impact of digital transformation on financial performance of manufacturing enterprises; the more digitalized the information technology (IT) architecture is when enterprises undergo digital transformation, the closer to hybrid cloud platform + agile manufacturing, the higher the inventory turnover rate and total asset turnover rate of enterprises will be; in the early stage of digital transformation of enterprises, the profitability performance of enterprises will be reduced. However, as the digitalization process of enterprises deepens, the net sales margin and total asset return of enterprises will gradually increase, which may be due to the reason that the impact of enterprise digital transformation on profitability performance has a certain lag.

Suggested Citation

  • Li Yonghong & Shao Jie & Zhan Ge & Zhou Ru, 2023. "The impact of enterprise digital transformation on financial performance—Evidence from Mainland China manufacturing firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(4), pages 2110-2124, June.
    • Handle: RePEc:wly:mgtdec:v:44:y:2023:i:4:p:2110-2124
    DOI: 10.1002/mde.3805
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    References listed on IDEAS

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    1. Fang-Yi Lo & Phuong-Quynh Nguyen & Kun-Huang Huarng, 2026. "How strategic resource transfer accelerates subsidiary’s growth," Review of Managerial Science, Springer, vol. 20(3), pages 903-927, March.
    2. Chen, Gaocai & Liu, Peng & Jiang, Aiying, 2024. "Does digital transformation in enterprises reduce debt default risk?," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    3. Benedek, Botond & Csiki, Ottó & Demeter, Krisztina & Losonci, Dávid & Szász, Levente, 2025. "Financial impact of digitalization – A time-lagged analysis," International Journal of Production Economics, Elsevier, vol. 288(C).
    4. Carmen Elena Stoenoiu & Lorentz Jäntschi, 2024. "Connecting the Computer Skills with General Performance of Companies—An Eastern European Study," Sustainability, MDPI, vol. 16(22), pages 1-25, November.
    5. Syed, Tahir Abbas & Aslam, Haris & Bhatti, Zeeshan Ahmed & Mehmood, Fahad & Pahuja, Aseem, 2024. "Dynamic pricing for perishable goods: A data-driven digital transformation approach," International Journal of Production Economics, Elsevier, vol. 277(C).
    6. Yuqiong Zheng & Yue Peng & Wei Wang & Yunqiang Liu & Raymond Chiong, 2025. "Promotion or hindrance? Digital transformation of the supply chain and total factor productivity of midstream enterprises," Humanities and Social Sciences Communications, Palgrave Macmillan, vol. 12(1), pages 1-18, December.
    7. Changzheng Zhang & Yuchao Wang & Yanbing Zhang, 2025. "Can digital transformation improve commercial banks’ performance?," The Journal of Technology Transfer, Springer, vol. 50(4), pages 1341-1362, August.

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