Digital transformation and competitive advantage in manufacturing : the role of business model innovation

In the era of the digital economy, how digital transformation (DT) contributes to economic development has become a topic of growing interest. This study focuses on business model innovation (BMI) driven by DT in the manufacturing sector. From this perspective, we aim to explore how DT can reshape the fundamental connotation of economic development. To this end, we construct a mathematical model grounded in a Multi-Structural Economic System framework and employ econometric models focusing on fixed effects, mediation effects, and moderation effects. We also compile a panel dataset using data from China spanning from 2008 to 2024. The empirical findings reveal that BMI serves as a mediation mechanism between the DT and competitive advantage (CA) of manufacturing enterprises. However, competitive imitation of BMI by peer enterprises partially offsets this effect, weakening the relationship between DT and enhanced CA. These findings offer evidence-based insights into the role of BMI in the digital era. For policymakers and industry regulators, this study provides practical implications for promoting knowledge spillovers from BMI, thereby fostering market dynamism and enabling structural transformation in the manufacturing industry.