Digital technology adoption and innovation performance: a moderated mediation model

The underlying mechanism and boundary condition of the effects of emerging digital technology on firms' innovation activities need to be analysed. This study intends to explore how digital technology adoption (DTA) influences innovation performance (IP) in the context of firm digital transformation based on digital empowerment perspective and knowledge-based view. The mediating effect of knowledge base breadth (KBB) and knowledge base depth (KBD) and the moderating effect of technological capability (TC) are proposed and evaluated using panel data from Chinese listed companies. The results indicate that DTA significantly improves innovation performance, and this effect is mediated by KBB and KBD. Moreover, the indirect effect of the KBB is moderated by TC, which is not significant for KBD. Our findings offer an enhanced understanding of the performance implications of digital technologies and provide managerial insights into how unique competitive advantages and sustainable development of firms can be maintained in the digital economy era.