The Paradoxical Effect of Digital Transformation on Innovation Performance: Does Risk-Taking Matter? | IEEE Journals & Magazine | IEEE Xplore

The Paradoxical Effect of Digital Transformation on Innovation Performance: Does Risk-Taking Matter?


Abstract:

The impact of enterprises’ digital transformation on innovation performance has attracted the attention of enterprises and scholars. The positive effects of digital trans...Show More

Abstract:

The impact of enterprises’ digital transformation on innovation performance has attracted the attention of enterprises and scholars. The positive effects of digital transformation are well described in the literature, but the dark side of digital transformation and the digitalization paradox have been less explored. Meanwhile, the role of risk-taking seems to have been ignored. From the perspectives of dynamic capability theory and organizational inertia theory, this study explores the double-edged sword effect of enterprise digital transformation on innovation performance and the moderating role of the risk-taking level. Based on data from computer, communication, and other electronic equipment manufacturing sector companies listed in the Shanghai and Shenzhen stock markets from 2007 to 2020, the empirical results indicate that there is an inverted U-shaped relationship between digital transformation and innovation performance, and the corporate risk-taking level positively moderates the relationship such that the inverted-U shape becomes steeper (more positive for low degrees of digital transformation and more negative for high degrees of digital transformation) in enterprises with a high risk-taking level compared to enterprises with a low risk-taking level. This study enriches the current theoretical explanation of the digitalization paradox and provides practical inspiration for enterprises to implement digital transformation.
Published in: IEEE Transactions on Engineering Management ( Volume: 71)
Page(s): 3308 - 3324
Date of Publication: 05 December 2023

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