Can Digital Innovation Improve Firm Performance

Digital economy is a new economic form based on information and knowledge,which takes data as the key production factor and all-factor digital transformation as an important driving force.In the context of the digital economy,achieving high-quality economic development requires full efforts in quality change,efficiency change and power change,and scientific and technological innovation is crucial in this process.Scientific and technological innovation is a new driving force and new engine for economic growth under the current digital economy.The report of the 19th National Congress of the Communist Party of China listed the construction of digital China as a key task for building an innovative country,and General Secretary Xi Jinping stressed at the APEC(2020)meeting that the digital economy is the future development direction of the world,and innovation is the wings of the Asia-Pacific economy.China should continue to strengthen,optimize and expand the digital economy,enhance digital industrialization and industrial digitalization,deeply integrate the digital economy and the real economy,and promote the innovation and development of the digital economy.As the carrier of digital empowerment,enterprises are an important cornerstone of digital innovation and development,and are essential for building a complete and orderly digital innovation system and giving full play to the innovation effect of digital economy.Firm performance is an important indicator of the economic effect of digital innovation,what is the impact of digital innovation on enterprise performance? How does digital innovation affect firm performance differently in different contexts? How to effectively guide the positive role of micro-enterprise digital innovation? The research in this paper helps to answer the above questions to unravel the "black box" of the relationship between digital economy innovation and firm performance.This paper sorts out the relevant literature on digital innovation and firm performance,and theoretically analyzes the impact of digital innovation on firm performance and its role path based on Schumpeter’s innovation theory and resource base theory.In terms of empirical analysis,this paper takes the A-share listed companies in Shanghai and Shenzhen from 2016 to 2021 as a sample,constructs digital innovation measurement indicators from the level of enterprise patents,quantitatively studies the impact of digital innovation on firm performance,and studies the role path of digital innovation on firm performance from the perspectives of labor productivity,operating costs and enterprise competitive advantage.Further from the micro-enterprise level,meso-industry level and macro-system level,the impact of digital innovation on firm performance and the influencing factors of enterprise digital innovation are analyzed.Firstly,from the two micro perspectives of enterprise market position and enterprise scale,the regulatory effect of digital innovation and firm performance is tested.Secondly,from the meso perspective of digital economy industry types,the impact of digital industrialization and industrial digitalization on the relationship between digital innovation and firm performance is examined in groups,and the impact of the four sub-industries of digital industrialization on the relationship between digital innovation and firm performance is tested in groups.Finally,from the two macro perspectives of location-oriented policy and marketization process,the influencing factors of enterprise digital innovation are empirically studied,so as to provide theoretical support for better exerting the economic effect of digital innovation.The research in this paper finds that digital innovation can significantly improve firm performance,and achieve firm performance improvement through three paths: improving labor productivity,reducing operating costs,and enhancing enterprises’ competitive advantage.Further research finds that when the market position of enterprises is higher and the scale is larger,the more digital innovation can promote the performance of firm.Compared with industrial digitalization,digital industrialization can strengthen the positive correlation between digital innovation and firm performance,and digital product manufacturing and digital technology application industries in digital industrialization can play a more important role in improving firm performance of digital innovation.In addition,the double difference test shows that location-oriented policies play a positive role in promoting the innovation of enterprises’ digital economy.The marketization process can significantly promote the improvement of the innovation level of local enterprises’ digital economy.This paper enriches the research framework of digital innovation and firm performance,improves the transmission path of micro-enterprise digital innovation economic effect,enriches the research on the economic consequences and influencing factors of digital innovation,expands the research on the influencing factors of firm performance,provides intellectual support for promoting the innovation and development of micro-enterprise digital economy and performance improvement,and provides reliable quantitative evidence and management enlightenment for promoting the innovation and development of China’s digital economy.