Influence of digital innovation on entrepreneurial performance in small and medium-sized manufacturing enterprises

Abstract

The digital economy has developed rapidly, and determining how digital technology can be utilised to achieve business innovation has become a key concern for small and medium-sized manufacturing enterprises seeking to maintain their market competitiveness. Ensuring the successful execution of digital innovation strategies and improving enterprise performance have become key concerns for the managers of such enterprises. The current study considers Growth Enterprise Market (GEM)-listed small and medium-sized manufacturing enterprises to construct a theoretical framework for understanding the associations between digital innovation, digital readiness, and entrepreneurial performance. The study analyses 233 enterprises to empirically determine the influence of digital innovation on entrepreneurial performance through regression analysis. In addition, it explores the moderating effect of digital readiness on this association. Furthermore, the study conducts a case analysis based on its findings related to residuals to verify the robustness of its conclusions regarding main effects, thereby addressing the weakness of regression analysis in explaining individual heterogeneity. This study draws the following conclusions: (1) the breadth and depth of digital innovation in small and medium-sized manufacturing enterprises both have a significant positive influence on entrepreneurial performance, which indicates that enterprises incorporating digital technologies into multiple links of their value chains and more deeply integrating such technologies into these links can effectively enhance their growth and innovation performance. (2) Digital readiness has a significant, positive moderating effect on the association between digital innovation and entrepreneurial performance. That is, digital readiness helps firms overcome uncertainty in the innovation process and more effectively implement digital innovation.