Sustainable digital transformation path for manufacturing outwards foreign direct investment firms: Gradual or leapfrogging

Digital transformation plays an important role in improving the efficiency of production of enterprises and can provide strong support for green and sustainable development. Compared with domestic enterprises, outward foreign direct investment (OFDI) enterprises have greater access to advanced digital technology. This paper aims to analyze the path selection of green and sustainable production for the digital transformation of manufacturing outward foreign direct investment (OFDI) companies, whether gradual or leapfrogging. However, there is a lack of systemic game mechanisms and numerical simulation methods for heterogeneous enterprises. Based on the analysis of reverse technology spillover intensity of outward foreign direct investment (OFDI) and differences in the absorptive capacity of enterprises, we have proposed the evolutionary game model for different path selection of digital transformation of manufacturing enterprises, due to heterogeneous enterprises under different spillover degrees with numerical analysis methods. The research results show that: (i) Under low reverse technology spillover intensity, all enterprises evolve to a gradual transformation path, and enterprises with weaker absorptive capacity converge faster; (ii) There is a certain threshold for reverse technology spillover. When reverse technology spillover intensity exceeds the threshold, enterprises with stronger absorptive capacity converge to a leapfrog transformation path, but enterprises with weak absorptive capacity converge to a gradual transformation path; (iii) With high reverse technology spillover intensity, all enterprises evolve toward a leapfrog transformation path, and faster convergence happens to enterprises with higher absorptive capacity. The evolutionary game path of digital transformation in manufacturing enterprises is illustrated in Fig. 1.