Manufacturing breakthrough: analysing the differential effect of digital transformation on continuous innovation capability in enterprises

This study explores the relationship and influence mechanism between digital transformation and continuous innovation capability of enterprises, which shows that digital transformation promotes continuous innovation capability by enhancing corporate social responsibility, while the degree of fair competition in the market strengthens the relationship between digital transformation and continuous innovation capability. Data are derived from listed manufacturing industries in China from 2008 to 2020. The Heckman two-stage model is used to analyse the impact of digital transformation decisions on continuous innovation capability. Counterfactual estimation provides the average treatment effect of digitally transforming firms compared to non-digitally transforming firms. Empirical findings suggest that non-state-owned firms whose digital transformation multiplies the effect of continuous innovation capability, while state-owned firms do not benefit as much as expected; digital transformation has a better effect on improving the continuous innovation capability of high-tech firms than of non-high-tech firms.