Digital transformation, dynamic capability and total factor productivity of manufacturing enterprises

Purpose Enhancing total factor productivity through digital transformation is a crucial pathway for the high-quality development of manufacturing enterprises. This research aims to investigate the impact mechanisms of manufacturing enterprises’ total factor productivity in the context of digital transformation. Design/methodology/approach Using the data from 536 Chinese listed manufacturing enterprises from 2018 to 2021, this research divides digital transformation into two dimensions (i.e. digital transformation breadth and digital transformation depth) and examines their impacts on total factor productivity as well as the mediation effects of innovation capability and reconfiguration capacity. Findings It is found that digital transformation breadth, digital transformation depth and their interaction can positively affect manufacturing enterprises’ total factor productivity. The innovation capability and reconfiguration capacity of manufacturing enterprises act as mediators between digital transformation breadth and total factor productivity, as well as between digital transformation depth and total factor productivity. Originality/value This study is one of the first attempts to investigate the impact mechanisms of manufacturing enterprises’ total factor productivity from the perspective of digital transformation breadth and depth.