A study on the strategic momentum of SMEs’ digital transformation: Evidence from China

The digital transformation of Chinese SMEs faces the reality of slow start-up and difficult deepening. Considering the multi-stage characteristics of SMEs' digital transformation, this article is drawn on the theory of strategic momentum and the TOE framework is improved to examine the process of Chinese SMEs' digital transformation from the dimensions of response speed and implementation depth. Data from 221SMEs is analyzed through the fsQCA to explore the complex interactions between digital technology, organization, environment and the initial and deepening stages of Chinese SMEs' digital transformation. Three key findings are revealed. Firstly, to effectively promote the initiation speed and implementation depth of SMEs' digital transformation, a collaborative effort is required by entrepreneurs, digital service companies, customers, and government. Secondly, external factors have a significant promoting effect on both the initial and deepening stage of SMEs' digital transformation. Of particular note is the usability of digital technology, which is indicated to be a crucial factor for both the initial and integration stage. This indicates that SMEs exhibit a heightened sensitivity to the complexity and future uncertainty of digital technologies. Thirdly, by promoting the digitalization of industrial clusters, the deepening stage can be facilitated effectively by governments.