From non-digital to digital: Digitalization of technological innovation and firms’ digital transformation performance

Abstract

In the new wave of technological revolution, information technology is currently the most innovative areas around the world. Technological innovation is increasingly focused on digitalization. However, little research has attempted to investigate method to measure the digitalization of technological innovation and its impact. Based on longitudinal multiple data sources, including comprising patent documents, annual reports of listed Chinese manufacturing firms, a third-party database. We introduce a novel construct, namely digital technology proximity, to capture how firms digitize their technological innovation based on social network. Meanwhile, we consider firms’ digital transformation performance, measured by the proportion of digital-related revenue, as the impact of digitalization of technological innovation. Our unbalanced-panel regression and robustness tests reveal a positive link between digitalization of technological innovation and firms’ digital transformation performance, supporting the notion that technological innovation digitalization empowers firms’ digital transformation. In addition, digital innovation ability exerts a significant mediating effect for digitalization of technological innovation. This research introduces a new method of measuring the digitalization of technological innovation and its impact on digital transformation.