Digital marketing capabilities and firm performance: the strategic role of digital leadership in Chinese firms

Abstract

Purpose This study adopts the dynamic capabilities view to examine the relationship between digital marketing capabilities (DMC) and firm performance in Chinese firms undergoing digital transformation, with a particular focus on the moderating role of digital leadership in strengthening this link. Design/methodology/approach This study examines the relationships between DMC, firm performance, and the moderating role of digital leadership, using data from 365 Chinese marketing managers. Grounded in the resource-based view (RBV) and DCV, partial least squares structural equation modelling tested a higher-order DMC construct, controlling for firm type and industry, to validate its reliability, predictive power and performance impact. Findings The study finds that digital relationship management (DRM), social media engagement (SME) and digital marketing information management (DMIM) significantly form the higher-order DMC, positively impacting firm performance. Other dimensions – digital selling, marketing planning and implementation – were not significant. Digital leadership significantly moderates the DMC–performance relationship, enabling firms to strategically leverage DMC, refining understanding of DMC and highlighting leadership's critical role in realizing its strategic value. Research limitations/implications This study's cross-sectional, China-focused design limits causal inference and generalizability. Some DMC dimensions were excluded due to non-significance, and reliance on self-reported data may introduce bias. Future research should adopt longitudinal, cross-cultural and multi-method approaches, examine industry-specific effects, explore additional organizational factors and assess the boundary conditions of digital leadership to better understand how DMC drives firm performance. Practical implications Managers should prioritize DRM, SME and DMIM, aligning investments with customer type and strategic goals. Strong digital leadership is critical to orchestrate these capabilities, ensuring resources translate into performance gains. Firms should integrate DMC dimensions holistically, continuously evaluate effectiveness and adapt strategies to sustain competitive advantage in dynamic digital markets. Social implications This study underscores a positive social impact by showing how firms can enhance customer satisfaction and marketing effectiveness, leading to more tailored, responsive, and engaging consumer experiences. As companies adopt advanced digital strategies, they become better equipped to meet changing customer expectations, thereby improving the overall quality of digital interactions. In addition, fostering digital leadership supports the development of a more innovative and digitally capable business landscape. This advancement contributes to the delivery of safer, more efficient and socially valuable digital services. By refining digital marketing practices, firms can create more relevant, inclusive, and impactful engagements for individuals and communities. Originality/value This study integrates RBV and DCV to advance DMC research, consolidating fragmented conceptualizations and validating DRM, SME and DMIM as key dimensions. It highlights digital leadership's moderating role, showing that strategic orchestration of capabilities drives firm performance and extends theory.