The Speed of Digital Transformation and Firm Performance

To address the key question of whether the faster the speed of digital transformation is the better, it is necessary to delve into the specific process of digital transformation to conduct dynamic research. Based on the perspective of strategic change speed, we empirically examine the differential impact of the initiation and implementation speed of digital transformation on the short- and long-term performance of firms from the process perspective, using the listed companies in China’s Shanghai and Shenzhen A-shares from 2007 to 2021. We find that the initiation of digital transformation is negatively related to short-term performance and positively related to long-term performance; on the contrary, the implementation speed of digital transformation is positively related to short-term performance and negatively related to long-term performance. Slack resources can strengthen and weaken the impact of the initiation speed of digital transformation on short-term and long-term firm performance respectively, while strengthen and weaken the impact of implementation speed on short-term and long-term performance respectively. By distinguishing the initiation and implementation speed of digital transformation, we aim to clarify the theoretical paradoxes of “first mover - follower” and the “change - stability”, and integrate them in the study of digital transformation process.