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How digital transformation enhances firm performance: Underlying knowledge and mechanisms from the perspective of value creation

Lulu Cheng et al.

Journal of Innovation & Knowledge2026https://doi.org/10.1016/j.jik.2026.100952article
AJG 1ABDC C
Weight
0.37

What the paper says

The performance implications of digital transformation (DT) have been extensively scrutinized; however, few studies have focused on the mechanisms that boost performance. This study investigates the potential benefits of digital transformation (DT) from a value creation perspective within the value creation-appropriation (VCA) framework. Using panel data from listed firms in China, we show that DT improves firm performance by simultaneously enhancing innovation capability and reducing cost stickiness, two critical determinants of efficient value creation. We also identify customer concentration and relative capital intensity—key structural bases of value creation activities—as moderating these value creation mechanisms. Specifically, customer concentration weakens the positive effect of DT on innovation capability, while relative capital intensity strengthens both the innovation-enhancing and cost-reducing effects of DT. These findings contribute to existing literature on DT by revealing the underlying mechanisms linking digital initiatives to economic outcomes and identifying critical contingencies that shape this relationship.

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https://doi.org/https://doi.org/10.1016/j.jik.2026.100952

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@article{lulu2026,
  title        = {{How digital transformation enhances firm performance: Underlying knowledge and mechanisms from the perspective of value creation}},
  author       = {Lulu Cheng et al.},
  journal      = {Journal of Innovation & Knowledge},
  year         = {2026},
  doi          = {https://doi.org/https://doi.org/10.1016/j.jik.2026.100952},
}

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Evidence weight

0.37

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.16 × 0.4 = 0.06
M · momentum0.53 × 0.15 = 0.08
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.