IDEAS home Printed from https://ideas.repec.org/a/gam/jsusta/v14y2022i10p6012-d816319.html
   My bibliography  Save this article

Research on the Relationship between Digital Transformation and Performance of SMEs

Author

Listed:
  • Xiaoyan Teng

    (Business School, University of Shanghai for Science and Technology, Shanghai 200093, China)

  • Zhong Wu

    (School of Management, Shanghai University of International Business and Economics, Shanghai 201620, China)

  • Feng Yang

    (Business School, University of Shanghai for Science and Technology, Shanghai 200093, China)

Abstract

Objective: Through an empirical analysis of the performance of SMEs undergoing digital transformation, this study attempts to identify the influencing factors that determine their sustainable development to provide reference for academic researchers and industrial decision makers. Method: This study first uses an interview method to investigate the impact of SMEs’ three main resources on digital transformation: digital technology, employee digital skills, and digital transformation strategy. Second, we assess the impact of digital transformation on financial performance. Using the structural equation model, 335 valid questionnaires were recovered through the questionnaire method, and the key factors were identified using SPSS and SPSSAU tools. Results: In the Chinese context, digital transformation affects SME performance, and the three resources mentioned above are positively correlated with SMEs’ digital transformation. Digital transformation is positively correlated with performance, and it is the mediator of the impact of digital transformation strategies on performance. Conclusion: For SMEs, focusing on investing in digital technologies, employee digital skills, and digital transformation strategies are three key factors that are beneficial for digital transformation, thus helping to improve performance and maintain their sustainable development.

Suggested Citation

  • Xiaoyan Teng & Zhong Wu & Feng Yang, 2022. "Research on the Relationship between Digital Transformation and Performance of SMEs," Sustainability, MDPI, vol. 14(10), pages 1-17, May.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:10:p:6012-:d:816319
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/2071-1050/14/10/6012/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/2071-1050/14/10/6012/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Hartley, Janet L. & Sawaya, William J., 2019. "Tortoise, not the hare: Digital transformation of supply chain business processes," Business Horizons, Elsevier, vol. 62(6), pages 707-715.
    2. Xin Zhang & Yaoyu Xu & Liang Ma, 2022. "Research on Successful Factors and Influencing Mechanism of the Digital Transformation in SMEs," Sustainability, MDPI, vol. 14(5), pages 1-18, February.
    3. David J. Teece & Gary Pisano & Amy Shuen, 1997. "Dynamic capabilities and strategic management," Strategic Management Journal, Wiley Blackwell, vol. 18(7), pages 509-533, August.
    4. Scuotto, V & Nicotra, M. & Del Giudice, M. & Krueger, N. & Gregori, G.L., 2021. "A microfoundational perspective on SMEs’ growth in the digital transformation era," Journal of Business Research, Elsevier, vol. 129(C), pages 382-392.
    5. Verhoef, Peter C. & Broekhuizen, Thijs & Bart, Yakov & Bhattacharya, Abhi & Qi Dong, John & Fabian, Nicolai & Haenlein, Michael, 2021. "Digital transformation: A multidisciplinary reflection and research agenda," Journal of Business Research, Elsevier, vol. 122(C), pages 889-901.
    6. Tekic, Zeljko & Koroteev, Dmitry, 2019. "From disruptively digital to proudly analog: A holistic typology of digital transformation strategies," Business Horizons, Elsevier, vol. 62(6), pages 683-693.
    7. Ulrich Lichtenthaler, 2020. "Building Blocks of Successful Digital Transformation: Complementing Technology and Market Issues," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 17(01), pages 1-14, February.
    8. Seok-Soo KIM, 2021. "Sustainable Growth Variables by Industry Sectors and Their Influence on Changes in Business Models of SMEs in the Era of Digital Transformation," Sustainability, MDPI, vol. 13(13), pages 1-21, June.
    9. Birger Wernerfelt, 1984. "A resource‐based view of the firm," Strategic Management Journal, Wiley Blackwell, vol. 5(2), pages 171-180, April.
    10. Magistretti, Stefano & Dell’Era, Claudio & Messeni Petruzzelli, Antonio, 2019. "How intelligent is Watson? Enabling digital transformation through artificial intelligence," Business Horizons, Elsevier, vol. 62(6), pages 819-829.
    11. 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.
    12. Veronika Bikse & Inese Lusena-Ezera & Peteris Rivza & Baiba Rivza, 2021. "The Development of Digital Transformation and Relevant Competencies for Employees in the Context of the Impact of the COVID-19 Pandemic in Latvia," Sustainability, MDPI, vol. 13(16), pages 1-17, August.
    13. Mohsen Attaran & Sharmin Attaran, 2020. "Digital Transformation and Economic Contributions of 5G Networks," International Journal of Enterprise Information Systems (IJEIS), IGI Global, vol. 16(4), pages 58-79, October.
    14. Lumpkin, G. T. & Dess, Gregory G., 2001. "Linking two dimensions of entrepreneurial orientation to firm performance: The moderating role of environment and industry life cycle," Journal of Business Venturing, Elsevier, vol. 16(5), pages 429-451, September.
    15. Brush, Candida G. & Vanderwerf, Pieter A., 1992. "A comparison of methods and sources for obtaining estimates of new venture performance," Journal of Business Venturing, Elsevier, vol. 7(2), pages 157-170, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Guanqiao Zhang & Tao Wang & Yuhan Wang & Shuai Zhang & Wenhao Lin & Zixin Dou & Haitao Du, 2023. "Study on the Influencing Factors of Digital Transformation of Construction Enterprises from the Perspective of Dual Effects—A Hybrid Approach Based on PLS-SEM and fsQCA," Sustainability, MDPI, vol. 15(7), pages 1-22, April.
    2. Hongtao Wang & Wencheng Cao & Fei Wang, 2022. "Digital Transformation and Manufacturing Firm Performance: Evidence from China," Sustainability, MDPI, vol. 14(16), pages 1-18, August.
    3. Marjeta Marolt & Hans-Dieter Zimmermann & Andreja Pucihar, 2022. "Social Media Use and Business Performance in SMEs: The Mediating Roles of Relational Social Commerce Capability and Competitive Advantage," Sustainability, MDPI, vol. 14(22), pages 1-14, November.
    4. Jiajia Liu & Kexin Zhou & Ye Zhang & Fangcheng Tang, 2023. "The Effect of Financial Digital Transformation on Financial Performance: The Intermediary Effect of Information Symmetry and Operating Costs," Sustainability, MDPI, vol. 15(6), pages 1-22, March.
    5. Regina Diaz & Raul Montalvo, 2022. "Digital Transformation as an Enabler to Become More Efficient in Sustainability: Evidence from Five Leading Companies in the Mexican Market," Sustainability, MDPI, vol. 14(22), pages 1-19, November.
    6. Fernando Almeida & José Morais & José Duarte Santos, 2022. "A Bibliometric Analysis of the Scientific Outcomes of European Projects on the Digital Transformation of SMEs," Publications, MDPI, vol. 10(4), pages 1-18, September.
    7. Daniela Roxana Vuță & Eliza Nichifor & Ioana Bianca Chițu & Gabriel Brătucu, 2022. "Digital Transformation—Top Priority in Difficult Times: The Case Study of Romanian Micro-Enterprises and SMEs," Sustainability, MDPI, vol. 14(17), pages 1-14, August.
    8. Shuhao Liang & Tingting Li, 2022. "Can Digital Transformation Promote Innovation Performance in Manufacturing Enterprises? The Mediating Role of R&D Capability," Sustainability, MDPI, vol. 14(17), pages 1-20, September.
    9. Emmanuel Bruce & Zhao Shurong & Du Ying & Meng Yaqi & John Amoah & Sulemana Bankuoru Egala, 2023. "The Effect of Digital Marketing Adoption on SMEs Sustainable Growth: Empirical Evidence from Ghana," Sustainability, MDPI, vol. 15(6), pages 1-24, March.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Oliveira, Fabio & Kakabadse, Nada & Khan, Nadeem, 2022. "Board engagement with digital technologies: A resource dependence framework," Journal of Business Research, Elsevier, vol. 139(C), pages 804-818.
    2. Dominik M. Wielgos & Christian Homburg & Christina Kuehnl, 2021. "Digital business capability: its impact on firm and customer performance," Journal of the Academy of Marketing Science, Springer, vol. 49(4), pages 762-789, July.
    3. Claudio Vitari & Elisabetta Raguseo, 2016. "Big data value and financial performance: an empirical investigation [Digital data, dynamic capability and financial performance: an empirical investigation in the era of Big Data]," Post-Print halshs-01923271, HAL.
    4. Zhou, Zhongsheng & Li, Zhuo, 2023. "Corporate digital transformation and trade credit financing," Journal of Business Research, Elsevier, vol. 160(C).
    5. Brewis, Claire & Dibb, Sally & Meadows, Maureen, 2023. "Leveraging big data for strategic marketing: A dynamic capabilities model for incumbent firms," Technological Forecasting and Social Change, Elsevier, vol. 190(C).
    6. Li, Min & Liu, Na & Kou, Aiju & Chen, Wenchuan, 2023. "Customer concentration and digital transformation," International Review of Financial Analysis, Elsevier, vol. 89(C).
    7. Chih-Yi, Su & Bou-Wen, Lin, 2021. "Attack and defense in patent-based competition: A new paradigm of strategic decision-making in the era of the fourth industrial revolution," Technological Forecasting and Social Change, Elsevier, vol. 167(C).
    8. Navarro-García, Antonio & Ledesma-Chaves, Pablo & Gil-Cordero, Eloy & De-Juan-Vigaray, María Dolores, 2024. "Intangible resources, static and dynamic capabilities and perceived competitive advantage in exporting firms. A PLS-SEM/fsQCA approach," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    9. Sang-Uk Jung & Valeriia Shegai, 2023. "The Impact of Digital Marketing Innovation on Firm Performance: Mediation by Marketing Capability and Moderation by Firm Size," Sustainability, MDPI, vol. 15(7), pages 1-16, March.
    10. Mahmoud Abdulhadi Alabdali & Mohammad Asif Salam, 2022. "The Impact of Digital Transformation on Supply Chain Procurement for Creating Competitive Advantage: An Empirical Study," Sustainability, MDPI, vol. 14(19), pages 1-17, September.
    11. Tian Hongyun & William Adomako Kankam & Florence Appiah-Twum & Isaac Gumah Akolgo, 2019. "Effect of Social Capital on Firm Performance: The Role of Entrepreneurial Orientation and Dynamic Capability," International Review of Management and Marketing, Econjournals, vol. 9(4), pages 63-73.
    12. Xuejun Jin & Xiao Pan, 2023. "Government Attention, Market Competition and Firm Digital Transformation," Sustainability, MDPI, vol. 15(11), pages 1-27, June.
    13. Annosi, Maria Carmela & Capo, Francesca & Appio, Francesco Paolo & Bedetti, Ivan, 2023. "Unveiling micro-foundations of digital transformation: Cognitive models, routines, and organizational structures in agri-food SMEs," Technological Forecasting and Social Change, Elsevier, vol. 197(C).
    14. Zhao, Nanyang & Hong, Jiangtao & Lau, Kwok Hung, 2023. "Impact of supply chain digitalization on supply chain resilience and performance: A multi-mediation model," International Journal of Production Economics, Elsevier, vol. 259(C).
    15. Michael Sheppard, 2023. "The behavioural gap between entrepreneurial SME’s and high growth: evidence from Canada," International Entrepreneurship and Management Journal, Springer, vol. 19(1), pages 427-449, March.
    16. Hamid Etemad, 2019. "The competitive context of strategic orientation and strategy formulation in entrepreneurial and strategic internationalization: Multiple-player and multiple-period games," Journal of International Entrepreneurship, Springer, vol. 17(3), pages 279-286, September.
    17. Surender Khan & Anuj Goel, 2024. "A Perspective on Digital Transformation Among Indian Exporting Firms," FIIB Business Review, , vol. 13(1), pages 7-17, January.
    18. Mishra, Deepa Bhatt & Haider, Imran & Gunasekaran, Angappa & Sakib, Md. Nazmus & Malik, Nishtha & Rana, Nripendra P., 2023. "“Better together”: Right blend of business strategy and digital transformation strategies," International Journal of Production Economics, Elsevier, vol. 266(C).
    19. Gliga, Gabriela & Evers, Natasha, 2023. "Marketing capability development through networking – An entrepreneurial marketing perspective," Journal of Business Research, Elsevier, vol. 156(C).
    20. Ghafoori, Arman & Gupta, Manjul & Merhi, Mohammad I. & Gupta, Samrat & Shore, Adam P., 2024. "Toward the role of organizational culture in data-driven digital transformation," International Journal of Production Economics, Elsevier, vol. 271(C).

    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:gam:jsusta:v:14:y:2022:i:10:p:6012-:d:816319. 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.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with 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: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    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.