Digital Transformation, Operating Capacity and Firm Performance: Empirical Evidence from the Chinese Stock Market

Abstract

In the context of the digital economy, digital technologies such as big data, artificial intelligence, cloud computing and so on continue to promote enterprise value creation. This paper takes the annual reports of listed companies in Shanghai and Shenzhen A-shares from 2015 to 2021 as the object, constructs digital transformation indexes based on Word2Vec machine learning technology, and empirically analyzes the relationship between digital transformation, enterprise operating capacity and company performance. The study finds that: the higher the degree of digital transformation, the stronger the operating capacity of enterprises; the improvement of enterprise operating capacity can significantly enhance company performance; digital transformation will strengthen the positive effect of operating capacity on company performance. The study's findings not only reveal the moderating role of digital transformation in the relationship between enterprise operating capacity and company performance but also provide theoretical and empirical evidence for a comprehensive and objective evaluation of the implementation effect of digital transformation.