Digital Transformation and Firm Performance: A Research Review

Abstract

Digital transformation has become a critical strategic path for enterprises to enhance performance. This paper analyzes the mechanism through which digital transformation affects firm performance, revealing that it creates value via multiple pathways such as optimizing operational efficiency, innovating business models, and strengthening organizational resilience. Studies show that the in-depth application of digital technologies can significantly reduce transaction costs, accelerate market response, and expand the boundaries of value creation. However, transformation outcomes are moderated by contextual factors including firm size, industry characteristics, and institutional environment. Notably, successful digital transformation requires the synergistic evolution of technology application, organizational change, and strategic innovation, rather than simple technological superposition. This paper not only reveals the complex relationship between digital transformation and firm performance but also provides a theoretical basis for enterprises to formulate differentiated transformation strategies.