The effects of digital transformation on exploitation and exploration: does technological diversity matter?

Purpose For survival and prosperity, enterprises need to simultaneously engage in exploitation and exploration. Digital transformation is of great significance to enterprise innovation. However, the impacts of digital transformation on exploitation and exploration remain unclear. Moreover, the impacts of technological diversity on the relationships between digital transformation and exploitation and exploration are also unknown. Design/methodology/approach Based on an integrated perspective of dynamic capability theory and organizational inertia theory and using data from Chinese listed enterprises from 2007 to 2020, this study clarifies the effects of digital transformation on exploitation and exploration and assesses the moderating effect of technological diversity. Findings The results show that digital transformation improves exploitation, but negatively impacts exploration. Technological diversity mitigates the negative effect of digital transformation on exploration, but the moderating effect on the relationship between digital transformation and exploitation is not significant. Originality/value This study contributes to the existing literature on the digital paradox and provides guidance for enterprises to clarify the direction of digital transformation.