Examining the Role of Digital Transformation Practices Towards Manufacturing Operations : A Practice-Based View

Nowadays digitalization has played an increasingly important role in firms’ manufacturing operations. However, the performance outcomes of a firm’s digital transformation practices are still debated. There is also a lack of quantitative research that analyzes their associations using large data sets. Therefore, building on a practice-based view (PBV), this study develops a theoretical framework to illustrate the relationships between digital transformation practices and firms’ operational efficiency from three aspects including workforce productivity, physical asset efficiency and working capital efficiency. The role of industry competition in their relationships is then examined. Based on a large sample of Chinese manufacturing firms from 2016 to 2020 and employing multiple regression model, this study finds that digital transformation practices have significant and positive influences on all three aspects of firms’ operational efficiency. In addition, these positive associations are stronger for firms in industries with lower competition