IDEAS home Printed from https://ideas.repec.org/a/eee/finana/v101y2025ics1057521925000924.html
   My bibliography  Save this article

Digital economy, dual innovation capability and enterprise labor productivity

Author

Listed:
  • Xing, Manjiang
  • Gong, Chi
  • Moon, Gyu-Hyen
  • Ge, Xiaohong

Abstract

While digital economy development has emerged as a crucial driver of enterprise performance, existing research offers limited insights into how firms' innovation capabilities shape their ability to translate digital advancement into productivity gains. This gap is particularly significant given the varying success rates of digital transformation initiatives across enterprises. Drawing on organizational ambidexterity theory and utilizing panel data from Chinese listed companies (2010−2022), this study investigates how dual innovation capability moderates the relationship between digital economy development and enterprise labor productivity. Through comprehensive econometric analysis incorporating instrumental variables and multiple robustness checks, we find that digital economy development significantly enhances enterprise labor productivity, with this effect strengthened by both exploitative and exploratory innovation capabilities. Our heterogeneity analysis reveals that these relationships vary meaningfully across industry factor intensities and firm life cycle stages, with technology-intensive industries and growth-stage firms demonstrating superior ability to leverage digital resources. The findings extend digital transformation theory by illuminating the critical role of innovation capabilities in maximizing productivity gains from digital advancement, while offering practical insights for enterprises pursuing digital transformation strategies.

Suggested Citation

  • Xing, Manjiang & Gong, Chi & Moon, Gyu-Hyen & Ge, Xiaohong, 2025. "Digital economy, dual innovation capability and enterprise labor productivity," International Review of Financial Analysis, Elsevier, vol. 101(C).
    • Handle: RePEc:eee:finana:v:101:y:2025:i:c:s1057521925000924
    DOI: 10.1016/j.irfa.2025.104005
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1057521925000924
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.irfa.2025.104005?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Digital economy development; Labor productivity; Dual innovation capability; Factor intensity; Firm life cycle; Enterprise digital transformation;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • M15 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - IT Management

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finana:v:101:y:2025:i:c:s1057521925000924. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620166 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.