Can digital innovation promote digital and non-digital financial performance? The role of knowledge search

Purpose As digital technologies continue to flourish, digital innovation has emerged as a critical catalyst for business expansion and societal advancement. However, despite its acknowledged significance, limited research has examined how digital innovation translates into improved financial performance, particularly in distinguishing between digital and non-digital performance. This study aims to fill this gap by exploring the distinct impact of digital innovation on both digital and non-digital financial performance, and examining the moderating influence of knowledge search breadth and depth. Design/methodology/approach This study uses a sample comprising 651 Chinese high-technology firms. These high-tech enterprises serve as ideal subjects for this study, given their inherent emphasis on technological progress and innovation, which renders them exemplary representatives of the ongoing digital transformation trend. Findings This study finds that digital innovation positively affects both types of financial performance. Specifically, search breadth positively moderates these relationships, while search depth selectively enhances the positive impact on digital financial performance but dampens it for non-digital financial performance. Originality/value This study contributes to existing literature by empirically distinguishing the impacts of digital innovation on digital and non-digital financial performance. By examining the moderating roles of knowledge search breadth and depth, it offers a fresh perspective on strategic leveraging of digital innovation for economic value. With a focus on Chinese high-tech firms, this study provides a unique context, fills a literature gap and guides firms toward optimized digital strategies.