Digital transformation and the performance of family firms: a dynamic capabilities perspective

Digital transformation (DT) has become a critical strategy for enhancing a firm's market competitiveness, yet the relationship between digital transformation and firm performance remains contentious. This study employs a dynamic capabilities perspective to compare the impact of digital transformation on performance between family firms and non-family firms, exploring the effect differences at a micro level. The empirical results reveal that while digital transformation in family firms is less effective in enhancing short-term performance compared to non-family firms, it significantly boosts long-term performance more than in non-family firms. Dynamic capabilities serve as the mediating path between DT and performance. Furthermore, focusing on family control characteristics, the paper examines and explains why the effects of DT on performance differ between family and non-family firms. It finds that family ownership and family management weaken the enhancement effect of DT on dynamic capabilities, but family management strengthens the role of dynamic capabilities in improving long-term performance. By exploring the relationship between DT and performance through the lens of firm characteristics, this study not only expands the research perspective on DT in family firms but also contributes to the ongoing debate on the impact of DT.