The Impact of Digital Transformation on the Sustainable Growth of Specialized, Refined, Differentiated, and Innovative Enterprises: Based on the Perspective of Dynamic Capability Theory

Abstract

The sustainable growth and development of SRDI (specialized, refined, differentiated, and innovative) enterprises is an important foundation for promoting critical core technology breakthroughs and achieving high-quality economic development. Digital transformation is a power source that cannot be ignored in the process of enterprise growth. Based on the dynamic capability theory, this paper takes the listed national-level SRDI “Little Giants” enterprises in China from 2015 to 2022 as the research sample and empirically analyzes the intrinsic influence mechanism of digital transformation on the sustainable growth of SRDI enterprises. The study results show that digital transformation has a positive impact on both dynamic capabilities and the sustainable growth of SRDI enterprises. Dynamic capabilities positively affect the sustainable growth of SRDI enterprises, and the coordination and integration capability and learning and absorption capability of dynamic capabilities play a mediating role between digital transformation and the sustainable growth of SRDI enterprises. In addition, this study further finds that the contribution of digital transformation to the sustainable growth of SRDI enterprises is more significant among smaller enterprises, non-state-owned enterprises, and manufacturing enterprises. The findings enrich the research on the theoretical mechanisms of digital transformation for enterprise growth and provide empirical evidence and practical insights for the survival and development of SRDI enterprises and other small and medium-sized enterprises.

1. Introduction

SRDI enterprises refer to small and medium-sized enterprises with specialized, refined, differentiated, and innovative characteristics. Focusing on key segments of the market, such enterprises have become an important part of deepening the industrial chain and strengthening its resilience. They play an irreplaceable role in accelerating core technology breakthroughs and promoting high-quality economic development [1,2]. China’s economic development emphasizes the need to “support the development of small, medium, and micro enterprises” and “support the development of SRDI enterprises, and promote the advanced, intelligent, and green development of the manufacturing industry”. With the support of government departments, after nearly a decade of cultivation, the number of SRDI enterprises has increased dramatically, showing strong innovation ability and growth resilience to achieve strong growth. SRDI enterprises are an important mainstay in solving key technical problems and promoting the emergence of new quality productivity. How to promote the sustainable growth of SRDI enterprises has attracted the attention of scholars and become an important issue that needs to be solved urgently [3].

In the face of profound changes in information technology and market environments [4], digital transformation enables enterprises to develop new business models using digital technologies to help them improve performance and impact, and it has become a core strategy for achieving sustainable growth [5]. Digital transformation goes beyond the use of any single digital technology or traditional digital technology. It is a fundamental change in the organizational structure and business model of a company [6]. It can help enterprises create value and gain sustainable competitive advantage, which has been explored by many scholars [7,8]. The existing studies have shown that digital transformation can significantly improve enterprise total factor productivity [9] and promote sustainable growth [10] by reducing operating costs [11], alleviating financing constraints [12], and driving technological innovation and process change [13,14]. In addition, some scholars believe that digital transformation can not only promote the upgrade of this enterprise but also promote the enhancement of the focal enterprise through the information spillover effect [15] and even further influence other enterprises in the supply chain to achieve the overall improvement at the supply chain level [16]. These studies have not only explored the impact of digital transformation on the growth of enterprises themselves but also analyzed the role of digital transformation on the external supply synergy relationship of enterprises. They include both theoretical-level discussions and analyses of empirical processes. However, most of the studies take large enterprises or general enterprises as the research object and pay insufficient attention to SRDI enterprises, especially neglecting the important role played by digital technology in promoting the sustainable growth of small and medium-sized enterprises. Moreover, although some scholars have revealed the process of the role of digital elements on the growth of SRDI enterprises through case studies [2], it lacks corresponding empirical tests to draw quantitative conclusions. Therefore, from the perspective of SMEs, can digital transformation promote the sustainable growth of SRDI enterprises? What are the intrinsic influence mechanisms? How does the heterogeneity of firm characteristics play an impact? These questions require further discussion and analysis.

Based on this, this study takes the listed national-level SRDI “Little Giants” enterprises in China from 2015 to 2022 as the research sample, focuses on the cultivation and growth of SRDI enterprises, and constructs the research path and basic framework of “enterprise resources–enterprise capabilities–enterprise growth”. Using empirical analysis, this article aims to explore the mechanism of digital transformation on the sustainable growth of SRDI enterprises and to analyze the mediating role played by dynamic capabilities. The innovative and specific contributions of this study are as follows: (1) SRDI enterprises have stronger innovative capabilities and growth potential compared to general enterprise growth. This study explores the importance of digital transformation for the sustainable growth of SRDI enterprises from the perspective of digital empowerment. It fills a gap in the existing research and provides theoretical support for SRDI enterprises to actively implement digital transformation practices. (2) In terms of the influencing mechanism, this paper explores the mediating roles of coordination and integration capability, learning and absorption capability, and innovation and change capability between digital transformation and the sustainable growth of SRDI enterprises, respectively, using dynamic capabilities as the mediating variables. This further clarifies the formation of conduction paths and provides new ideas for SRDI enterprises to achieve their own sustainable growth. (3) This study further incorporates enterprise size, ownership, and industry type into the analysis framework. It discusses the role and boundaries of the impact of digital transformation on the sustainable growth of SRDI enterprises from different perspectives, providing a theoretical reference and decision-making basis for the growth of different SMEs.

The subsequent research in this paper is as follows: Section 2 constructs the theoretical framework of this article and, based on this, proposes the research hypotheses through theoretical analyses; Section 3 describes the research methodology of this paper, including the selection of samples and data, the definition of variables, and the setting of models; Section 4 reports the regression results and hypothesis validation, testing robustness and endogeneity issues, while discussing the results of the heterogeneity analysis of the baseline regression; and Section 5 describes the research conclusions and significance, as well as limitations and future prospects.

2. Theoretical Framework and Research Hypotheses

2.1. Theoretical Framework

Penrose’s theory of enterprise growth suggests that an enterprise is a collection of human, material, and financial resources. The internal resources possessed by enterprises are the fundamental driving force behind their growth and determine, to the greatest extent possible, the direction of their growth [17]. This study builds a theoretical framework based on the “enterprise resources–enterprise capabilities–enterprise growth” framework established by Professor Penrose to construct a theoretical model of the impact of digital transformation on the sustainable growth of SRDI enterprises.

The status of resources possessed by an enterprise is the basis for determining its capabilities [18]. The competitive advantage of enterprises comes from the interactive and synergistic effect of resource-based elements and dynamic capability-based elements [19]. In the context of digital economy, digital resources become the key resources for the sustainable growth of SRDI enterprises. The use of digital resources by enterprises under digital transformation can guide the rational allocation of tangible resources and the cross-border integration of intangible resources, constituting a new resource base for the dynamic capabilities of enterprises [20]. Digital transformation can accelerate data management and the dynamic update of resources and achieve the coordination, integration, and reconfiguration of existing resources. At the same time, the development and application of digital technology can broaden the channels for enterprises to acquire new knowledge, promote the release and exchange of enterprise information and resources, and achieve innovative breakthroughs in critical core technology. Therefore, digital resources under digital transformation can help to improve the dynamic capabilities of enterprises and realize the theoretical path of “enterprise resources–enterprise capabilities”.

Enterprise capabilities determine the speed, mode, and boundaries of enterprise growth [21]. The key to the capabilities of SRDI enterprises is dynamic capabilities, which can help enterprises perceive opportunities and threats in a timely manner and achieve sustainable growth [20]. Dynamic capability is the ability to integrate, establish, and reconfigure internal and external resources to cope with the rapidly changing environment [22], which is the core soft power of enterprises to build competitive advantages [23]. Enterprises need to establish a strong resource integration capability to maintain their competitive advantage by quickly adjusting or reconfiguring their resource portfolio. At the same time, the improvement in learning and absorption capability and innovation and change capability helps enterprises to introduce external knowledge and technology, accelerate the process of independent innovation, promote the iterative upgrading of products and services, and enhance the productivity and innovation efficiency of enterprises. Therefore, the construction of dynamic capabilities can help realize the sustainable growth of SRDI enterprises and realize the theoretical path of “enterprise capabilities–enterprise growth”.

In summary, this study constructs a theoretical framework for the sustainable growth mechanism of SRDI enterprises based on the analytical model of “enterprise resources–enterprise capabilities–enterprise growth”. The model is shown in Figure 1. This study aims to reveal the intrinsic influence mechanism of digital transformation on the sustainable growth of SRDI enterprises and, at the same time, analyzes the mediating role played by dynamic capabilities and clarifies the formation of its transmission path.

2.2. Research Hypotheses

2.2.1. Digital Transformation and Sustainable Growth of SRDI Enterprises

The theory of the techno-economic paradigm holds that the technological revolution triggers economic change [24]. The digital economy is essentially a new generation of digital technologies leading to fundamental changes in the way of production practices. The digital transformation of enterprises is an inevitable requirement of economic development and a micro embodiment of the techno-economic revolution [25]. Enterprises use digital technologies to automate operational processes and support traditional business transformation and business model innovation [26]. This process builds new core competencies, enhances enterprise value [4], and has a transformative impact on enterprise growth. SRDI enterprises focus on niche areas and bear the burden of critical core technology breakthroughs. Their digital transformation plays an important role in sustainable growth that cannot be ignored.

Digital transformation helps SRDI enterprises to achieve sustainable growth, mainly because it can drive the transformation of enterprises to networked, decentralized, and cross-border characteristics, so as to capture scale economies. Firstly, digital transformation enables enterprises to shift from linear progress to the circular, multi-centered, and parallel development of a networked industrial ecosystem. In this process, enterprises are able to access new resource networks, ecological networks, and value networks. The externalities and explosiveness of the network can quickly circle and absorb new customers [27]. At the same time, enterprises in the network are more likely to obtain the support of other actors, thus reducing transaction costs [28] and improving business effectiveness [29]. Secondly, the use of digital technology can be decentralized [30]. This is conducive to the precise docking of production and marketing, supply and demand, and other information exchange modes, alleviating the inefficiency of resource allocation brought by information asymmetry [31]. Enterprises can meet the ever-increasing demand at a lower cost, which has a positive effect on the sustainable growth of SRDI enterprises. Finally, the cross-border nature of digital technology improves the ability of SRDI enterprises to expand their services and innovate to new fields and new demands. The use of emerging technologies such as artificial intelligence and cloud computing can broaden the space for data mining and cultivate a high degree of enterprise sensitivity to market demand [32]. This assists enterprises to respond quickly to individualized and decentralized consumer demands, increase organizational flexibility and agility [33], and sustainably gain competitive advantage.

In summary, as digital transformation continues, enterprises adapt to new digital processes and practices. Networked, decentralized, and cross-border features also bring new resources, new customers, and new capabilities to enterprises. They can not only access new avenues of value creation but also gain good economies of scale and achieve sustainable growth. Therefore, this study proposes the following hypothesis:

H1: 

Digital transformation positively affects the sustainable growth of SRDI enterprises.

2.2.2. Digital Transformation and Dynamic Capability

Digital transformation is essentially a process of organizational change [34]. Establishing continuous adaptive mechanisms to cope with environmental changes on this basis is the key to successful transformation. Dynamic capability refers to a higher level of an enterprise’s ability to integrate, build, and reconfigure internal and external resources or capabilities [35]. Enterprises cultivate dynamic capabilities to be able to cope with rapidly changing business environments [36]. The process of the continuous integration of digital technologies with the organizational structure and business processes of an enterprise can effectively cultivate dynamic capabilities and make full use of its functions [37]. According to the existing literature [38,39], studies have classified dynamic capabilities into three aspects: coordination and integration capability, learning and absorption capability, and innovation and change capability.

Firstly, digital technology can help enterprises optimize the factor allocation of different segments and improve the systematic collaboration efficiency of each segment. In terms of traditional production factor allocation, digital transformation can change the original business logic by introducing digital technology into the specific production behavior of enterprises [40]. For enterprises to overcome the path dependence of the traditional production situation, they should use technical analysis of production factors that will be concentrated in the field of high value feedback; at the same time, the network can analyze in real time, adjust the combination of resource allocation, and constantly adjust and optimize the allocation of production factors according to market demand [41,42]. In terms of the combination of traditional production factors and digital factors, digital transformation leverages underlying digital technologies such as artificial intelligence, blockchain, cloud computing, and big data [39] to help SRDI enterprises expand their resource coordination and integration capability, break down the original physical barriers, and alleviate the problem of resource constraints [43].

Secondly, the application of digital technology can enable SRDI enterprises to acquire external information and knowledge resources in a timely manner [44]. This can effectively promote the accumulation and exchange of heterogeneous and tacit knowledge among enterprises [45] and further enhance their ability to learn and absorb interactively [46]. Digital connectivity breaks down spatial and temporal boundaries to expand the depth and breadth of information flow [47]. In terms of acquiring and learning knowledge, digital transformation helps enterprises continuously acquire knowledge shared by stakeholders, including collaborators, consumers, and competitors. Digital technology empowers enterprises to quickly connect internal and external information sources to achieve interactive learning between internal cognition and the external environment [46]. In terms of absorbing and utilizing knowledge, digital technology makes it possible for real-time communication and exchange within the enterprise. This helps organizational members to better utilize and transform new knowledge and technologies acquired from outside and enhances the organization’s ability to learn, absorb, and create knowledge [48].

Finally, enterprises use emerging digital technologies to be able to perceive new market opportunities and develop new products or service processes based on market demand, promoting innovation and change capability [49]. In terms of underlying technologies, digital transformation provides the necessary digital infrastructure for product innovation and organizational change in enterprises. This helps enterprises to analyze market development trends by using underlying technologies, such as big data, IoT, and cloud computing. It further grasps the needs of users, thus promoting the iterative upgrading of products and services and facilitating the digital reform of production and organizational processes [50]. In terms of technology application, enterprises have strengthened their connection with users through digital technologies. They are able to understand and meet the core needs of users in a timely manner. This not only improves the product experience of users but also enhances the responsiveness of enterprises to adjustments in user needs and promotes their efficiency in innovation and change [11].

In summary, digital transformation helps enterprises improve their dynamic capabilities through technological renewal and organizational reconfiguration. The process of enterprise digital transformation is also the process of shaping and improving the dynamic capabilities of enterprises [51]. Therefore, this study proposes the following hypotheses:

H2a: 

Digital transformation positively affects coordination and integration capability.

H2b: 

Digital transformation positively affects learning and absorption capability.

H2c: 

Digital transformation positively affects innovation and change capability.

2.2.3. Dynamic Capability and Sustainable Growth of SRDI Enterprises

SRDI enterprises must update and adjust their business strategies to adapt to the ever-changing external environment if they want to improve their organizational resilience and flexible decision-making capability [52]. From the perspective of dynamic capability theory, it is believed that dynamic capabilities can help enterprises effectively reduce the uncertainty of the external environment and overcome the rigid constraints and path dependence within the enterprise [53]. This process enables enterprises to gain competitive advantage and maintain sustainable growth in a dynamically changing market environment [22]. Dynamic capabilities have been studied as a source and pathway for enterprise growth [54,55]. Dynamic capabilities strengthen organizational practices and managerial skills, enabling enterprises to integrate and build new skills to cope with changes in highly competitive markets [56]. Its final result is to create and maintain the sustainable growth of enterprises [57].

Firstly, the coordination and integration capability integrates and rationalizes internal and external resources into a collective system [39], creating a unique competitive advantage through the process of resource orchestration. This capability is critical for realizing the full potential of growth of SRDI enterprises [58]. The existing research suggests that the long-term competitive advantage and excess performance of enterprises depend on the allocation of resources created by dynamic capabilities [59]. In terms of coordinating internal resources, SRDI enterprises utilize coordination and integration capability for internal resource accumulation, which facilitates enterprise information acquisition and resource development. This capability matches the resource base to the changing environment [22] and creates market changes [60]. It is an important capability that is indispensable for achieving sustainable growth of the enterprise. In terms of integrating internal and external resources, coordination and integration capability transforms externally acquired information into key knowledge that guides strategic actions and integrates it with relevant resources within the organization [61]. This process can transform raw resources into actual outputs, continuously improve product quality and service process, and achieve sustainable growth of enterprises [62].

Secondly, enterprises with high learning and absorption capability have a high level of knowledge acquisition and utilization. They are able to introduce internal and external knowledge and advanced technology into their product manufacturing and production processes more quickly [63]. This process can help SRDI enterprises maintain performance in highly volatile market environments and achieve sustainable growth objectives [64]. In terms of improving existing products, increased learning and absorption capability accelerates the flow of knowledge and technology through various segments. This enables departments to access advanced knowledge and technology at lower costs and use them to improve the quality of products and services [65]. This virtuous cycle lays the foundation for achieving sustainable growth [66]. In terms of building new products, enterprises utilizing learning and absorption capability are able to significantly improve the exchange and interaction of tacit knowledge [44]. On this basis, organizational members use digital knowledge acquisition channels to access other heterogeneous and novel knowledge for innovative product portfolios. Enterprises continuously develop new products and services in response to market demand to achieve competitive advantage and good growth performance [66].

Finally, innovation and change capability is the driving force behind the rapid development of SRDI enterprises [67]. Enterprises adapt to the uncertainty of the business environment and competitive landscape through continuous technological innovation and organizational change [68]. This process can help enterprises maintain a faster development speed and gain sustainable competitive advantages, which is conducive to sustainable growth [67]. In terms of technological innovation, innovation and change capability can help SRDI enterprises to escape from the existing competitive predicament, accelerate the optimization and upgrading of products and services, and enhance their adaptability to environmental changes [69]. Meanwhile, innovative change endeavors to translate new knowledge into real economic growth. It facilitates enterprises to overcome technological barriers and break down technological barriers [70] to achieve breakthrough innovation and high-quality growth of enterprises [69]. In terms of organizational change, innovation and change capability improves the way of operation and processes of the enterprise through process innovation to increase productivity and quality [71]. It also changes the organizational structure and management style of the enterprise through management innovation and stimulates the creativity and potential of employees [72]. It is the key for enterprises to achieve sustainable growth.

In summary, dynamic capabilities enable enterprises to coordinate resources, learn and absorb new knowledge and technology, and make continuous technological innovation and change, which help enterprises maintain sustainable growth in the changing market environment. Therefore, this study proposes the following hypotheses:

H3a: 

Coordination and integration capability positively affects the sustainable growth of SRDI enterprises.

H3b: 

Learning and absorption capability positively affects the sustainable growth of SRDI enterprises.

H3c: 

Innovation and change capability positively affects the sustainable growth of SRDI enterprises.

2.2.4. The Mediating Role of Dynamic Capability

Dynamic capability theory suggests that enterprises with dynamic capabilities are able to integrate, create, and reconfigure internal and external resources to cope with rapidly changing market environments and gain advantages over competitors [22]. Digital transformation is a systematic technological change that implies not only changes in resource allocation but also dynamic adjustments in the organizational structure [70]. SRDI enterprises, although they are a high-quality part of small and medium-sized enterprises, still lack the necessary knowledge, resources, capabilities, and a proper understanding of digital opportunities and have difficulties in adopting emerging technologies [73]. Overcoming these difficulties requires enterprises to build dynamic capabilities to respond to technological innovations promptly. Dynamic capabilities not only help in the adoption of digital technologies but also play a crucial role in realizing the maximum potential of the technology [74]. It is a key indispensable condition for the sustainable growth of the enterprise.

Firstly, digital transformation through coordination and integration capability emphasizes the continuous and iterative process of resource reorganization in organizations [75]. Enterprises employ digital technologies to coordinate, integrate, and reconfigure existing resources to build unique resource portfolios to maintain competitive advantage and enterprise growth. As the digital transformation process continues, SRDI enterprises are able to integrate and reorganize their internal resources with the help of data-based management technologies. In this process, enterprises can use intelligent tools to design, manufacture, and support products and innovations across the enterprise and its value chain. They build win–win relationships with their stakeholders and achieve mutual growth [76]. Further, organizations use digital technologies to link to external resource networks, enabling an effective interface between internal and external resources. At the same time, enterprises coordinate, redeploy, and reconfigure these resources and knowledge through coordination and integration capabilities. This can achieve the desired development goals and sustainable growth of SRDI enterprises [52].

Secondly, digital transformation is a process of improving the learning and absorption capability of enterprises. It enables enterprises to rapidly link internal and external information resources, increase the breadth and depth of information, achieve two-way learning of internal and external knowledge, and achieve the goal of positively promoting the sustainable growth of enterprises [77]. Embedding digital technology within the organization enables SRDI enterprises to enhance the effectiveness of interactive learning between internal and external actors and strengthens their ability to learn and absorb quality resources in business networks [78]. Further, this capability helps to broaden the organization’s cognitive boundaries, continuously improve the quality of products and services [79], meet the actual needs of consumers, and achieve sustainable growth of enterprises. At the same time, SRDI enterprises use digital technology to implement digital transformation activities, absorbing and utilizing a variety of external knowledge and heterogeneous resources by building a strong learning and absorption capability [80]. This process not only helps to promote the knowledge integration and value creation of enterprises but also enables the results of digital transformation to be reflected in enterprise growth [81].

Finally, digital transformation provides the necessary hardware and software facilities for enterprises to cultivate innovation and change capability, which can help them develop new products and services and explore new markets [82]. Enterprises continue to strengthen their connection with product markets through innovative change to achieve sustainable growth in various aspects, such as revenue growth, technological breakthroughs, and market expansion. Digital technology can help enterprises obtain user feedback in time [83]. At the same time, based on the feedback suggestions, enterprises can change their operation strategies through innovation and change capability to improve product quality and productivity [84] and satisfy diversified needs of customers [85]. Further, it enables enterprises to continuously adapt to the highly changing external environment [86], innovate business models and value creation models, and maintain enterprise growth. In addition, SRDI enterprises bear the burden of technological breakthroughs. Digital transformation can have a positive impact on achieving more innovative products and services [87], as well as increasing the level of breakthrough innovation of enterprises [88]. This further contributes to the sustainable growth of SRDI enterprises.

In summary, digital transformation leverages dynamic capabilities, continuously coordinates and integrates internal and external resources, strengthens the learning and absorption of external knowledge, and accelerates the process of innovation and change through the integration of resources and the accumulation of knowledge. It can promote the sustainable growth of SRDI enterprises. Therefore, this study proposes the following hypotheses:

H4a: 

Coordination and integration capability mediates between digital transformation and the sustainable growth of SRDI enterprises.

H4b: 

Learning and absorption capability mediates between digital transformation and the sustainable growth of SRDI enterprises.

H4c: 

Innovation and change capability mediates between digital transformation and the sustainable growth of SRDI enterprises.

3. Methodology

3.1. Sample and Data

SRDI enterprises refer to small and medium-sized enterprises with specialized, refined, differentiated, and innovative characteristics. In particular, “Little Giants” enterprises are the leaders among SRDI enterprises. “Little Giants” enterprises focus on niche markets, have strong innovation capability and good growth, and have gradually formed advantages and scales in their respective product areas. These enterprises have a high degree of industry concentration and are mainly located in the manufacturing and service industries. They are small in size and generally have no more than 500 employees. They mainly provide key parts, components, and supporting products for large enterprises and projects and are excellent representatives of SRDI enterprises, providing strong support for China to achieve high-quality development and build a new development pattern. In addition, since the State Council issued the Guiding Opinions on Actively Promoting the “Internet+” Actions in 2015, the digital transformation of Chinese enterprises has entered a phase of rapid development. SRDI “Little Giants” enterprises are also trying to achieve the sustainable growth of enterprises through digital transformation. Therefore, this study selected the listed national-level SRDI “Little Giants” enterprises from 2015 to 2022 as the research sample for empirical analysis.

Therefore, this study set the time frame as 2015–2022 and selected listed national-level SRDI “Little Giants” enterprises as the research sample. The data were mainly obtained from the China Stock Market Accounting Research (CSMAR) database, Wind database, and annual reports of listed enterprises disclosed on the Juchao Information Network. In order to ensure the validity of the research data and the reliability of the conclusions, this study excluded enterprises in the ST and *ST categories and excluded enterprises with missing key variables. At the same time, continuous variables were winsorized at the 1st and 99th percentiles to mitigate the impact of outliers. Finally, 1525 unbalanced panel observations of 364 national-level SRDI “Little Giants” enterprises were obtained. The data were processed and analyzed using Stata 18.0 software.

3.2. Variable Definition

3.2.1. Dependent Variable

The existing studies have mainly used indicators such as the Sales Revenue Growth Rate (SRGR); Return on Equity (ROE); Environmental, Social, and Governance (ESG) scores; and Tobin’s Q to measure the sustainable growth of SMEs [89,90,91]. In the above articles, growth in financial metrics only reflects the profitability and efficiency of the company at the moment, and good ESG performance is usually seen as a positive sign of future growth. Compared with these potential indicators, Tobin’s Q combines the two dimensions of financial performance and market evaluation. It is able to reflect both the short-term and long-term performance of an enterprise, thus providing a more accurate measure of the sustainable growth of SRDI enterprises. In addition, due to the existence of a certain lag in digital transformation, Tobin’s Q is able to reflect both the existing and potential value of the enterprise, which makes up for the shortcomings of other indicators that cannot reflect the impact of digitization on the enterprise’s strategic flexibility, long-term value, and intangible assets. Therefore, this study adopted Tobin’s Q to measure the sustainable growth of SRDI enterprises with obvious advantages [91,92,93,94], which can better reflect the real contribution of digital transformation to the sustainable growth of enterprises.

3.2.2. Independent Variable

Drawing on Wu et al. [95], this study used textual analysis to construct proxy indicators of digital transformation. Firstly, Python 2.3 software was used to crawl the annual reports of the studied companies from 2015 to 2022 on the Juchao Information Network, which is converted into a database in TXT format. Secondly, according to Wu et al. [95] and Zhang et al.’s [39] study on extracting feature keywords, 132 feature keywords were identified from the underlying technology of digital transformation and its application practice, and the word frequency was summed up to obtain the total indicators of digital transformation. Finally, in order to avoid the loss of sample data caused by the indicator of 0, the natural logarithm was taken after adding 1 to the total indicator.

3.2.3. Mediating Variables

The mediating variable is dynamic capability (DC). Based on the existing literature [38,39,96], this study classified dynamic capabilities into three dimensions: coordination and integration capability (CIC), learning and absorption capability (LAC), and innovation and change capability (IRC).

(1)

Coordination and integration capability (CIC). Drawing on Zhang et al. [39], this study used the total asset turnover to measure the coordination and integration capability of enterprises.

(2)

Learning and absorption capability (LAC). This study drew on the study of Tsai [97] and used the ratio of the R&D expenditure to the operating revenue to measure the learning and absorption capability of enterprises.

(3)

Innovation and change capability (IRC). Drawing on Yang et al. [70], this study adopted the standardized sum of two indicators, namely, R&D investment intensity and the ratio of technical staff to total employees, to measure the innovation and change capability of enterprises.

3.2.4. Control Variables

In order to improve the accuracy of the research results, regarding the existing literature [86,98,99], this study selected the following variables for control: age of enterprise (Age), expressed as the logarithmically processed number of years since the establishment of the enterprise; concentration of equity (Equity), expressed as the percentage of shares held by the enterprise’s largest shareholder; capital structure (Capital), expressed as the gearing ratio, meaning the ratio of the total liabilities to total assets of the enterprise; the degree of market competition (Compete), expressed in terms of the gross operating profit margin, meaning the ratio of the gross profit to sales revenue of the enterprise; and enterprise profitability (Profit), expressed as the enterprise return on net assets, meaning the ratio of the corporate net profit to average shareholders’ equity. All the variables measured are shown in

Table 1. Definition and measurement of variables.

Symbol	Variable	Measurement
Growth	Sustainable growth of SRDI enterprises	Tobin’s Q, market value of the enterprise/replacement cost of the asset
Digit	Digital transformation	Frequency of digital transformation words in the annual report add 1 to take natural logarithms
CIC	Coordination and integration capability	Total asset turnover
LAC	Learning and absorption capability	R&D expenditure/operating revenue
IRC	Innovation and change capability	Standardized sum of R&D investment intensity and ratio of technical staff to total employees.
Age	Age of enterprise	Logarithmizeds enterprise years of establishment
Equity	Concentration of equity	Shareholding ratio of the largest shareholder
Capital	Capital structure	Gearing ratio
Compete	Degree of market competition	Enterprise gross operating profit margin
Profit	Enterprise profitability	Enterprise return on net assets

.

3.3. Model Setting

This study constructed the following regression model (1) to test hypothesis H1.

Growth_i,t = β₀ + β₁Digit_i,t + β₂Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(1)

This study developed regression models (2)–(4) to test hypotheses H2a–H2c.

CIC_i,t = β₀ + β₁Digit_i,t + β₂Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(2)

LAC_i,t = β₀ + β₁Digit_i,t + β₂Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(3)

IRC_i,t = β₀ + β₁Digit_i,t + β₂Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(4)

This study constructed models (5)–(7) to test hypotheses H3a–H3c.

Growth_i,t = β₀ + β₁CIC_i,t + β₂Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(5)

Growth_i,t = β₀ + β₁LAC_i,t + β₂Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(6)

Growth_i,t = β₀ + β₁IRC_i,t + β₂Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(7)

Next, the model construction was carried out based on the study of Baron and Kenny [100] and concerning the mediation effect testing process proposed by Wen et al. [101]. Firstly, the effect of digital transformation on the sustainable growth of SRDI enterprises was tested through model (1) above. Then, the effects of digital transformation on the dynamic capabilities of the mediating variables were tested through the above models (2)–(4). Finally, models (8)–(10) were constructed to represent the impact of dynamic capabilities on the sustainable growth of SRDI enterprises after controlling for the impact of digital transformation to test hypotheses H4a–H4c.

Growth_i,t =β₀ + β₁Digit_i,t + β₂CIC + β₃Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(8)

Growth_i,t =β₀ + β₁Digit_i,t + β₂LAC + β₃Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(9)

Growth_i,t =β₀ + β₁Digit_i,t + β₂IRC + β₃Controls_i,t + ΣIndustry + ΣYear + ε_i,t

(10)

where i stands for the firm; t represents the year; β is the parameter; and ε denotes the disturbance.

4. Regression Results

4.1. Descriptive Statistics and Correlation Analysis

Table 2. Descriptive statistics results.

Variables	N	Mean	S.D.	Min	Max
Growth	1525	2.567	1.938	0.761	23.465
Digit	1525	4.836	0.995	0.000	7.236
CIC	1525	0.531	0.315	0.069	3.562
LAC	1525	8.283	7.831	0.740	107.510
IRC	1525	0.222	0.133	0.016	0.928
Age	1525	2.984	0.258	1.946	3.738
Equity	1525	0.626	0.138	0.226	1.000
Capital	1525	0.282	0.155	0.019	0.784
Compete	1525	0.388	0.170	−0.077	0.964
Profit	1525	0.082	0.092	−1.185	0.637

reports the results of the descriptive statistics for all the study variables. The mean value of the sustainable growth of SRDI enterprises (Growth) is 2.567, and the standard deviation is 1.938, indicating that the sample enterprises have a high level of sustainable growth and a large difference in growth. Digital transformation (Digit) has a mean value of 4.836 and a standard deviation of 0.995, with a minimum value of 0 and a maximum value of 7.236, indicating that the digital transformation of SRDI enterprises is polarized, with some enterprises taking the lead in active transformation, but others are not sufficiently motivated for digital transformation. The mean value of coordination and integration capability (CIC) is 0.531 and the standard deviation is small, indicating that the internal management effectiveness of most sample enterprises is relatively stable. The mean value of learning and absorption capability (LAC) is 8.283, and the standard deviation is 7.831, indicating that there is a huge gap between the proportion of R&D expenditure and operating revenue of SRDI enterprises in the sample, which is mainly due to the different degree of recognition of the importance of R&D by enterprises. For the innovation and change capability (IRC), the mean value is 0.222 and the standard deviation is small, indicating that the innovation and change capability of the sample enterprises is low and the gap is small, and there is still some room for improvement.

Table 3. Pearson correlation analysis results.

Variables	Growth	Digit	CIC	LAC	IRC	Age	Equity	Capital	Compete	Profit
Growth	1.000
Digit	0.112 ***	1.000
CIC	0.148 ***	0.121 **	1.000
LAC	0.217 ***	0.213 ***	0.138 ***	1.000
IRC	0.120 ***	0.206 ***	0.164 ***	0.683 ***	1.000
Age	−0.029 ***	−0.185 ***	0.040	−0.234 ***	−0.206 ***	1.000
Equity	−0.215 ***	−0.059 **	0.267 ***	−0.088 ***	−0.094 ***	−0.145 ***	1.000
Capital	−0.225 ***	0.181 ***	0.280 ***	−0.238 ***	−0.079 ***	−0.013	−0.149 ***	1.000
Compete	0.320 ***	0.026	−0.294 ***	0.481 ***	0.226 ***	−0.124 ***	0.054 **	−0.481 ***	1.000
Profit	0.161 ***	−0.035	0.481 ***	−0.219 ***	−0.139 ***	−0.013	0.338 ***	−0.107 ***	0.310 ***	1.000

Note: *** denotes 1% significance level; ** denotes 5% significance level.

shows the results of the Pearson correlation analysis for each variable. Among them, digital transformation (Digit) is significantly and positively correlated with the sustainable growth of SRDI enterprises (Growth), which preliminarily supports hypothesis H1. Digital transformation (Digit) is significantly and positively correlated with coordination and integration capability (CIC), learning and absorption capability (LAC), and innovation and change capability (IRC), which preliminarily verifies hypotheses H2a, H2b, and H2c. Meanwhile, the above three dynamic capabilities are also significantly and positively correlated with the sustainable growth of SRDI enterprises (Growth), preliminarily verifying hypotheses H3a, H3b, and H3c. In addition, most of the control variables and the sustainable growth of SRDI enterprises show a significant correlation, indicating that the choice of control variables is reasonable.

4.2. Regression Analysis

This study adopts the fixed effect model for regression analysis, and the results are shown in

Table 4. Regression results.

Variables	(1)	(2)	(3)	(4)	(5)	(6)	(7)	(8)	(9)	(10)
	Growth	CIC	LAC	IRC	Growth	Growth	Growth	Growth	Growth	Growth
L. Digit	0.049 *** (0.012)	0.018 ** (0.008)	0.044 *** (0.010)	0.025 *** (0.009)				0.047 *** (0.012)	0.041 *** (0.012)	0.047 *** (0.012)
CIC					0.066 ** (0.052)			0.094 ** (0.047)
LAC						0.128 *** (0.038)			0.090 ** (0.042)
IRC							0.068 * (0.036)			0.032 (0.040)
Age	−0.008 *** (0.076)	0.085 (0.068)	−0.477 *** (0.092)	−0.435 *** (0.096)	−0.282 *** (0.098)	0.055 (0.062)	0.026 (0.061)	−0.016 (0.077)	0.028 (0.076)	0.004 (0.076)
Equity	−0.006 *** (0.001)	0.003 ** (0.001)	−0.004 ** (0.001)	0.001 (0.001)	0.002 (0.002)	−0.009 *** (0.001)	−0.009 *** (0.001)	−0.006 *** (0.001)	−0.006 *** (0.001)	−0.006 *** (0.001)
Capital	−0.115 *** (0.031)	0.130 *** (0.037)	−0.057 (0.038)	−0.023 (0.028)	−0.292 *** (0.039)	−0.081 *** (0.028)	−0.078 *** (0.027)	−0.128 *** (0.032)	−0.108 *** (0.031)	−0.114 *** (0.031)
Compete	0.650 *** (0.135)	−0.907 *** (0.156)	1.496 *** (0.180)	0.250 ** (0.124)	0.078 ** (0.034)	0.320 ** (0.144)	0.499 *** (0.128)	0.740 *** (0.141)	0.498 *** (0.159)	0.631 *** (0.137)
Profit	1.043 *** (0.185)	2.749 *** (0.244)	−2.250 *** (0.256)	−0.340 ** (0.141)	1.572 *** (0.447)	1.278 *** (0.220)	0.990 *** (0.197)	0.774 *** (0.218)	1.289 *** (0.224)	1.070 *** (0.191)
Industry	Control	Control	Control	Control	Control	Control	Control	Control	Control	Control
Year	Control	Control	Control	Control	Control	Control	Control	Control	Control	Control
Constant	−0.013 (0.020)	−0.046 *** (0.018)	0.056 ** (0.024)	0.014 (0.027)	−0.056 ** (0.023)	−0.055 *** (0.018)	−0.052 *** (0.018)	−0.009 (0.020)	−0.015 (0.020)	−0.013 (0.020)
N	1162	1162	1162	1162	1525	1525	1525	1162	1162	1162
Adj.R2	0.2342	0.5235	0.5158	0.1324	0.1109	0.3071	0.2846	0.2429	0.2698	0.2421

Note: ***, **, and * denote 1%, 5%, and 10% significance levels, respectively.

. Considering that there is a certain time lag from the implementation of digital transformation to the substance of digital transformation affecting the sustainable growth of SRDI enterprises, this study draws on the paper of Ni et al. [10], which participates in the regression with a one-period lag of the independent variable digital transformation (Digit). The setting alleviates the endogeneity problem to some extent.

Column (1) is the result of multiple regression on the sample based on model (1) constructed in the previous section. The regression coefficient of digital transformation (L. Digit) is 0.049 and passes the 1% significance level test, indicating that digital transformation positively promotes the sustainable growth of SRDI enterprises. Hypothesis H1 is valid. Next, regression tests are conducted on the sample according to the research models (2)-(4) constructed earlier. Column (2) shows that digital transformation (L. Digit) and the coordination and integration capability (CIC) are significantly and positively correlated at the 5% confidence level, indicating that the application of digital technology can help SRDI enterprises to coordinate, optimize, and reorganize their resources. Hypothesis H2a is verified. The results in column (3) show that digital transformation (L. Digit) significantly affects the increase in learning and absorption capability (LAC) of SRDI enterprises at the 1% confidence level. Hypothesis H2b is tested. Column (4) shows that digital transformation (L. Digit) and innovation and change capability (IRC) are significantly and positively related at the 1% confidence level. Enterprises’ use of advanced digital technologies positively affects their innovation and change capability. Hypothesis H2c is tested.

Meanwhile, the sample is tested according to the models (5)–(7) constructed in the previous section. The results in column (5) illustrate that coordination and integration capability (CIC) and the sustainable growth of SRDI enterprises (Growth) are significantly and positively correlated at the 5% confidence level. The ability of enterprises to match their resource base with the changing external environment through their coordination and integration capability is essential for achieving the sustainable growth of SRDI enterprises. Hypothesis H3a is tested. Column (6) shows the regression results of learning and absorption capability (LAC) on the sustainable growth of SRDI enterprises (Growth), and the regression coefficient is significant at the 1% confidence level. The results indicate that the improvement in learning and absorption capability can help enterprises achieve their growth objectives in highly volatile market environments. Hypothesis H3b is verified. Column (7) shows that innovation and change capability (IRC) and the sustainable growth of SRDI enterprises (Growth) are significantly and positively related at the 10% confidence level. Innovation and change capability helps enterprises achieve more innovative products and a faster time-to-market, which is an important capability indispensable for the sustainable growth of SRDI enterprises. Hypothesis H3c is tested.

On this basis, referring to the stepwise regression coefficient method proposed by Wen et al. [101], this study carries out the test of the mediating effect of dynamic capabilities. This study has verified the positive effect of digital transformation on the sustainable growth of SRDI enterprises, passing the first step test. Meanwhile, this study has verified the positive effect of digital transformation on coordination and integration capability, learning and absorption capability, and innovation and change capability, passing the second step test. Next, this study conducts a regression analysis based on the constructed models (8)–(10), indicating the impact of dynamic capabilities on the sustainable growth of SRDI enterprises after controlling for the effect of digital transformation.

The results in column (8) show that digital transformation (L. Digit) is significantly and positively related to the sustainable growth of SRDI enterprises (Growth) at the 1% confidence level. Coordination and integration capability (CIC) is significantly and positively related to the sustainable growth of SRDI enterprises (Growth) at the 5% confidence level. The results suggest that coordination and integration capability plays a partial mediating effect between digital transformation and the sustainable growth of SRDI enterprises. On this basis, the mediating role of the coordination and integration capability (CIC) was tested by the Sobel test, Z = 2.123 > 1.96 and p = 0.034 < 0.05, which indicates that the mediating role of coordination and integration capability is established and robust by the Sobel test. Hypothesis H4a is tested. Similarly, column (9) in the table shows the results of the mediation effect test of learning and absorption capability. The results show that both digital transformation (L. Digit) and learning and absorption capability (LAC) are significantly and positively related to the sustainable growth of SRDI enterprises (Growth). This proves that learning and absorption capability plays a partial mediating effect between digital transformation and the sustainable growth of SRDI enterprises. Further, the Sobel test for the mediating role of learning and absorption capability (LAC) was conducted, Z = 4.401 > 1.96 and p = 0.000 < 0.05, which indicates that the mediating role of the learning and absorption capability is established and robust by the Sobel test. Hypothesis H4b is tested. The regression results in column (10) of the table show that digital transformation (L. Digit) is significantly and positively related to the sustainable growth of SRDI enterprises (Growth). However, the relationship between innovation and change capability (IRC) and the sustainable growth of SRDI enterprises (Growth) does not pass the significance test for correlation. According to the model setting, this situation needs to be further analyzed by the Sobel test or Bootstrap test to see whether the mediating effect exists or not. The Sobel test for the mediating role of learning and absorption capability (LAC) was conducted, Z = −0.249 < 1.96 and p = 0.803 > 0.05, and indicates that there is no significant mediating effect of innovation and change capability. Meanwhile, the Bootstrap test results show that the 95% confidence interval of the mediation effect is [−0.0003, 0.0097], which contains 0, again indicating that there is no mediation effect of innovation and change capability between digital transformation and the sustainable growth of SRDI enterprises. Hypothesis H4c is not tested. This is mainly because digital transformation is a long-term practical process [102]. It leads to the reorganization of enterprise resources and organizational restructuring that may affect the original innovation and change process, which is not conducive to innovation and change efforts in the short term. Meanwhile, innovation and change capability is a dynamic capability with a disruptive nature [103]. It requires a certain change time and adaptation process to have an impact on the sustainable growth of the enterprise, which has a time lag effect [104].Therefore, the lag in innovation returns makes it difficult for innovation and change capability to play a positive mediating role in the short term. This conclusion is similar to the findings of Yu et al. [105], who concluded that digital embedding fails to enhance enterprises’ competitive advantage through technological innovation mediation. Xu et al. [104] also support our results that disruptive innovation practices in enterprises take some time to produce the corresponding outcomes, while the impact of digital transformation on innovative change has a certain lag.

4.3. Robustness Tests and Endogeneity Treatment

This study conducted a series of robustness tests on the benchmark regression between digital transformation and the sustainable growth of SRDI enterprises, and the results are shown in

Table 5. Robustness test results.

Variables	(1)	(2)	(3)	(4)
	Growth-Rev	Growth	Growth	Growth
L. Digit	0.078 ** (0.034)
L. Digit-tech		0.036 *** (0.014)
L. Digit-app			0.051 *** (0.012)
L. Digit-excl2020				0.047 *** (0.013)
Control Variables	Control	Control	Control	Control
Industry	Control	Control	Control	Control
Year	Control	Control	Control	Control
Constant	−0.009 (0.041)	−0.007 (0.020)	−0.014 (0.020)	−0.019 (0.020)
N	1162	1162	1162	867
Adj.R2	0.1206	0.2478	0.2343	0.2409

Note: *** denotes 1% significance level; ** denotes 5% significance level.

. Among them, column (1) is the robustness test of replacing the dependent variable proxies. Drawing on Fang et al. [106] and Nason et al. [107], this paper replaces the dependent variable proxy from the previous Tobin’s Q to the growth rate of enterprise revenue. At this point, digital transformation (L. Digit) can significantly promote the sustainable growth of SRDI enterprises (Growth-rev) at the 1% significance level, and the test results support the benchmark regression. Next, drawing on the methodology of Xu et al. [108], this study decomposes the proxies of the independent variable digital transformation (L. Digit) into two components of underlying digital technology (L. Digit-tech) and digital technology application (L. Digit-app) for robustness tests. The results in columns (2)–(3) show that both underlying digital technology (L. Digit-tech) and digital technology application (L. Digit-app) have a significant positive impact on the sustainable growth of SRDI enterprises (Growth). The test results support the benchmark regression. In addition, the COVID-19 pandemic may have a significant impact on the degree of digital transformation and the level of enterprise growth of SRDI enterprises. In this regard, this study draws on Jin et al. [109] and excludes the sample data in 2020 for the regression test. The results in column (4) show that digital transformation (L. Digit-excl2020) has a facilitating effect on the sustainable growth of SRDI enterprises (Growth) at the 1% significance level. The results remain in good agreement with the benchmark regression results.

There is an endogeneity problem between digital transformation and the sustainable growth of SRDI enterprises resulting from mutual causation. This study mitigated this problem to some extent by time-lagging (L. Digit) the independent variable digital transformation (Digit). On this basis, this study uses the instrumental variable method to further mitigate the endogeneity problem. Drawing on Huang et al. [110] and Yuan et al. [111], this study uses the result of multiplying the number of Internet users in China in the previous year (Inter) by the number of landline telephones per 100 people in each city in 1984 (Tele₁₉₈₄) as an instrumental variable for digital transformation. On the one hand, the development of Internet technology in China began with dial-up access to landline telephone wires, and the historical communication technology in the region where the enterprise is located usually has some influence on the subsequent development of information technology in terms of user habits and technological continuity, which satisfies the relevance condition. On the other hand, as a traditional communication tool, the main function of landline telephones is to provide communication services to local residents, which will not have a direct impact on the growth of enterprises during the sample period, satisfying the exogeneity condition. Therefore, the choice of instrumental variable is reasonable.

Table 6. Endogenous treatment results.

Variables	(1)	(2)
	L. Digit	Growth
Inter × Tele1984	0.212 *** (0.017)
L. Digit		0.012 ** (0.006)
Control Variables	Control	Control
Industry	Control	Control
Year	Control	Control
Constant	−2.853 *** (0.220)	−0.149 ** (0.075)
N	1162	1162
Adj.R2	0.3996	0.2381

Note: *** denotes 1% significance level; ** denotes 5% significance level.

presents the results of the instrumental variable regression using two-stage least squares (2SLS). Column (1) shows the regression results of an instrumental variable under the first stage. The results show that the coefficient of Inter×Tele₁₉₈₄ is 0.212, which passes the test of significance at the 1% level. This indicates a significant correlation between the selected instrumental variable and the endogenous explanatory variable. Column (2) presents the results of the second-stage regression. The estimated coefficient of digital transformation (L. Digit) on the sustainable growth of SRDI enterprises (Growth) is 0.012 and passes the significance test at the 5% level. The results indicate that the effect of digital transformation on the sustainable growth of SRDI enterprises is significantly positive, consistent with the results of the benchmark regression above.

4.4. Heterogeneity Analysis

4.4.1. Heterogeneity Analysis Based on Enterprise Size

The differences in business strategy and organizational structure due to differences in enterprise size may affect the effectiveness of digital transformation on the sustainable growth of SRDI enterprises. Thus, this study divides the sample enterprises into below-average-sized enterprises and above-average-sized enterprises based on the mean value of their total assets and conducts heterogeneity analyses based on enterprise size. The results are shown in

Table 7. Results of heterogeneity analysis based on enterprise size.

Variables	(1)	(2)
	Below Average Size	Above Average Size
	Growth	Growth
L. Digit	0.059 *** (0.017)	0.048 *** (0.020)
Control Variables	Control	Control
Industry	Control	Control
Year	Control	Control
Constant	0.010 (0.025)	−0.021 (0.030)
N	528	501
Adj.R2	0.3713	0.1611

Note: *** denotes 1% significance level.

. Digital transformation has a more significant contribution to the sustainable growth of below-average-sized SRDI enterprises, with a relatively weaker impact on above-average-sized enterprises. This is mainly due to the fact that larger enterprises are larger in volume and there is a degree of organizational inertia. As a result, their reaction time to digital transformation is longer, and it takes more time for enterprises to apply digital technologies to achieve sustainable growth. In contrast, below-average-sized businesses are more agile and flexible. They are more likely to be positively impacted by digital transformation. Therefore, we argue that the impact of digital transformation on the sustainable growth of SRDI enterprises is moderated by enterprise size.

4.4.2. Heterogeneity Analysis Based on Enterprise Ownership

Enterprises of different ownership differ in terms of social responsibility, strategic positioning, and development direction. Based on this, this study divides the SRDI enterprises in the sample into SOEs and non-SOEs for the heterogeneity analysis based on enterprise ownership. The specific results are shown in

Table 8. Results of heterogeneity analysis based on enterprise ownership.

Variables	(1)	(2)
	State Owned	Non-State Owned
	Growth	Growth
L. Digit	0.048 (0.046)	0.055 *** (0.012)
Control Variables	Control	Control
Industry	Control	Control
Year	Control	Control
Constant	−0.052 (0.098)	−0.009 (0.020)
N	94	1056
Adj.R2	0.2424	0.2343

Note: *** denotes 1% significance level.

. The results show that digital transformation has a significant positive effect on the sustainable growth of non-state-owned enterprises and a non-significant effect on state-owned enterprises. This is because state-owned enterprises often shoulder social responsibility and face pressure to assess the value of public assets. They have a weaker need for digital transformation. However, non-state-owned enterprises are more flexible in terms of resource restructuring and organizational change. They are more willing to innovate using emerging digital technologies to maintain their competitive advantage and sustainable growth. Therefore, this study argues that enterprise ownership moderates the effect of digital transformation on the sustainable growth of SRDI enterprises.

4.4.3. Heterogeneity Analysis Based on Enterprise Industry Type

The effect of digital transformation on the sustainable growth of enterprises may also be moderated by the type of industry. Accordingly, this study divides the SRDI enterprises into manufacturing enterprises and non-manufacturing enterprises for the heterogeneity analysis based on the type of enterprise industry. The results are shown in

Table 9. Results of heterogeneity analysis based on enterprise industry type.

Variables	(1)	(2)
	Manufacturing Industry	Non-Manufacturing Industry
	Growth	Growth
L. Digit	0.047 *** (0.012)	0.111 (0.070)
Control Variables	Control	Control
Industry	Control	Control
Year	Control	Control
Constant	−0.013 (0.021)	−0.028 (0.062)
N	1074	81
Adj.R2	0.2389	0.2236

Note: *** denotes 1% significance level.

. The implementation of digital transformation has a more significant contributing effect on the sustainable growth of manufacturing enterprises and a non-significant effect on non-manufacturing enterprises. The reason is that in manufacturing enterprises, digital technologies have a higher degree of integration with production and business activities. Digital technologies can be quickly and efficiently applied to production and manufacturing processes, directly contributing to the sustainable growth of SRDI enterprises. In contrast, the process of non-manufacturing enterprises using digital technology to achieve sustainable growth is mostly an indirect impact process. It takes a longer period of integration to have a significant positive impact. Therefore, it is argued that the heterogeneity of the industry type affects the effectiveness of digital transformation on the sustainable growth of SRDI enterprises.

5. Research Conclusions and Insights

5.1. Research Conclusions

Taking the listed national-level SRDI “Little Giants” enterprises in China from 2015 to 2022 as the research sample, this study empirically examines the impact mechanism of digital transformation on the sustainable growth of SRDI enterprises. On this basis, from the perspective of dynamic capability, this study classifies dynamic capabilities into coordination and integration capability, learning and absorption capability, and innovation and change capability and further explores the mediating role of dynamic capabilities in this mechanism. This study finds that, firstly, digital transformation positively affects the sustainable growth of SRDI enterprises, and hypothesis H1 is valid. Secondly, digital transformation has a significant facilitating effect on the enterprise construction of a dynamic capability system. Digital technology helps enterprises optimize factor allocation, improves the systematic collaboration efficiency of each link, and expands coordination and integration capability, and hypothesis H2a stands; digital transformation facilitates the release and exchange of knowledge, information, and resources of SRDI enterprises and enhances their ability to learn, absorb, and output, and hypothesis H2b stands; and SRDI enterprises use digital technology to perceive new market opportunities and, according to the market demand, develop new products or services, which promotes innovation and change capability, and hypothesis H2c is valid. Thirdly, dynamic capabilities positively affect the sustainable growth of SRDI enterprises. Coordination and integration capability creates unique competitive advantages through resource integration and resource orchestration, which helps achieve the sustainable growth of SRDI enterprises, and hypothesis H3a holds; learning and absorption capability helps SRDI enterprises to develop and utilize external knowledge and integrate the knowledge into the product manufacturing and production process to achieve the growth goal, and hypothesis H3b stands; and innovation and change capability helps enterprises to achieve more innovative products and a faster speed to market, which is conducive to the sustainable growth of SRDI enterprises, and hypothesis H3c is valid. Fourthly, dynamic capabilities play a partial mediating role between digital transformation and the sustainable growth of SRDI enterprises. Specifically, coordination and integration capability and learning and absorption capability mediate between digital transformation and the sustainable growth of SRDI enterprises, and hypotheses H4a and H4b are established. Innovation and change capability does not have a mediating effect between digital transformation and the sustainable growth of SRDI enterprises, and hypothesis H4c is not validated. The main reason is that digital transformation implements resource reorganization and organizational restructuring through innovation and change capability, which may affect the original work process and make it difficult to have a significant effect on the sustainable growth of enterprises in the short term. Finally, heterogeneity analyses further suggest that the contribution of digital transformation to the sustainable growth of SRDI enterprises is more significant among smaller enterprises, non-state-owned enterprises, and manufacturing enterprises.

5.2. Theoretical Significance

The theoretical significance of this study lies in the fact that previous studies on digital transformation and enterprise growth have mostly focused on large enterprises and have paid insufficient attention to small and medium-sized enterprises (SMEs). In particular, they have neglected the important role of digital technology in promoting the sustainable growth process of SMEs. This paper takes SRDI enterprises as the research object and explores the intrinsic influence of digital transformation in promoting the sustainable growth of SRDI enterprises by empirical analysis, which provides new ideas for exploring the influencing factors of the sustainable growth of SMEs in the context of the digital economy. The regression results support hypothesis H1 that digital transformation positively promotes the sustainable growth of SRDI enterprises, which is consistent with our expectation. This result is also similar to the findings of Wu et al. [112], who found that digital transformation significantly increases enterprise total factor productivity through the triple channels of information transparency, innovation capability, and financial stability, further enhancing the sustainability of enterprises. Cennamo et al. [113] also support the idea that digital transformation will have a significant impact on multiple aspects of organizations by revolutionizing their strategic choices, organizational capabilities, and management mechanisms, which will have a transformative effect on sustainable growth. Their arguments support our view. In this paper, we further incorporate enterprise size, enterprise ownership, and enterprise industry type into the analytical framework to explore the role boundaries of the impact of digital transformation on the sustainable growth of SRDI enterprises from different perspectives. It provides a theoretical reference and decision-making basis for the growth of SMEs.

Meanwhile, based on the dynamic capability theory, our study explores the mediating role of dynamic capabilities between digital transformation and the sustainable growth of SRDI enterprises and further clarifies its influence mechanism and transmission path. The statistical results support hypotheses H2 and H3 and partially support hypothesis H4. That is, dynamic capabilities mediate the relationship between digital transformation and the sustainable growth of SRDI enterprises to a certain extent. These results are partially consistent with Wu et al. [37], who argued that the process of the continuous integration of digital technologies with enterprises’ organizational structure and business processes can effectively cultivate dynamic capabilities and give full play to their functions. Salvato and Vassolo [54] argue that dynamic capabilities strengthen organizational practices and managerial skills, help enterprises adapt to rapidly changing external environments, and are capable of achieving sustainable growth. Liu et al. [114] explored the mediating role played by dynamic capabilities between digital transformation and the level of green innovation from the perspective of dynamic capability. The above studies partially support our conclusions. We classified dynamic capabilities into coordination and integration capability [39], learning and absorption capability [97], and innovation and change capability [70]. Then, we found that coordination and integration capability and learning and absorption capability play a mediating role between digital transformation and the sustainable growth of SRDI enterprises, while the mediating role of innovation and change capability is not significant. The findings not only enrich the related literature on digital transformation and enterprise growth but also introduce dynamic capability as a mediating variable, which provides new insights for analyzing the impact of digital transformation on the cultivation of enterprise capabilities and exploring the growth path of SMEs.

5.3. Practical Significance

The research findings have certain practical guidance for both enterprise managers and government departments. For enterprise managers, firstly, it is important to correctly understand the digital opportunities and actively carry out digital transformation. This process is important for coping with the impact of changes in the external environment and maintaining sustainable growth. Managers should actively carry out digital transformation in product production, organizational management, business model, etc., and deeply integrate digital technology with traditional business to save management costs, improve operational efficiency, and achieve enterprise growth and high-quality development. Secondly, the results show that the effect of digital transformation varies greatly among SRDI enterprises of different enterprise sizes, ownerships, and industry types. Managers of different enterprises should also recognize that there is no standard answer to digital transformation. Enterprises should start from their own needs and pain points and look for digital transformation solutions that fit their development stage and vision based on the characteristics of their product production or service provision. Thirdly, enterprise managers should pay attention to the bridging role of dynamic capabilities and actively use digital technology to cultivate dynamic capability systems to avoid the solidification of original enterprise capabilities. Managers can use coordination and integration capability, learning and absorption capability, and innovation and change capability as entry points to reorganize internal and external resources and learn new knowledge for technological innovation, to achieve business upgrading and sustainable growth.

For government departments, firstly, they should focus their core resources on providing technical and financial assistance for the digital transformation of less powerful SRDI enterprises. At the same time, government departments should pay attention to the construction of regional digital infrastructure and provide a favorable external environment for enterprises to use digital technology to promote sustainable growth. Secondly, according to the different sizes, ownerships, and industry types of SRDI enterprises, government departments should formulate personalized growth strategies for enterprises based on the laws of enterprise development. On this basis, government departments should set up representative SRDI enterprises to guide the digital transformation practices of other SMEs and help them seize new opportunities in the Internet era. Thirdly, government departments provide enterprises with capital, resources, talents, and technical support by increasing financial subsidies, guiding the concentration and distribution of resources, introducing outstanding talents, and establishing a science and technology innovation service system. In this way, the government can reduce the difficulty of digital transformation for SRDI enterprises, help them build their dynamic capability system, and further promote their sustainable growth.

In addition, this study provides practical insights for enterprise growth and economic development in other developing countries. Firstly, SMEs play an important role in promoting employment, innovation, and economic dynamism. Through policy guidance and support, China attaches great importance to the growth of SMEs, especially SRDI enterprises. Other developing countries should also regard SMEs as an important force for economic development and provide them with appropriate financial subsidies and tax incentives. They should also encourage SMEs to deepen their market segments, focus on core competencies, and develop unique market advantages internationally. Secondly, digital transformation has become a necessary path for the high-quality development of SMEs. China actively promotes the in-depth integration of digital technology with SRDI enterprises, which enhances their innovative capacity and productivity. This provides strong support for economic development. Other developing countries can learn from this experience by strengthening the construction of digital infrastructure and promoting the application of advanced technologies, such as cloud computing, big data and artificial intelligence. This can provide SMEs with support and convenience for digital transformation and achieve their sustainable growth. It is worth noting that enterprises are heterogeneous. Different enterprises need to carry out digital transformation practices in the light of their actual situation. Thirdly, in the context of the digital economy, enterprises need to build dynamic capability systems to cope with the rapidly changing market environment. Enterprises in other developing countries also need to pay attention to this point. They can make use of digital technology to cultivate multiple dynamic capabilities within their organizations, specifically coordination and integration capability, learning absorption capability, and innovation and change capability. This can respond to market changes in time, provide impetus for sustained enterprise development, and further promote industrial upgrading and economic growth. In summary, this study proposes a mechanism for digital transformation on the sustainable growth of SRDI enterprises in China. This provides valuable practical experience and inspiration for other developing countries. By drawing on these experiences, and through innovation and exploration in their own contexts, developing countries can promote the high-quality development of SMEs and contribute to the prosperity and progress of the economy as a whole.

5.4. Research Limitations and Future Prospects

Firstly, this paper takes the listed Chinese national SRDI “Little Giants” enterprises as the research object, which is representative but also has certain research limitations. Future research could collect more data on other types of SMEs and conduct a comparative study of SME growth. In addition, the sample is still limited to China, and future research should collect data from different countries to explore universally applicable theories. Secondly, although the use of textual analysis to measure digital transformation in this paper is a feasible measurement method, the measurement dimension is relatively single. In the future, we will establish a comprehensive multidimensional indicator system to measure the level of digital transformation of enterprises to obtain more accurate conclusions. Thirdly, we only explore the functional relationship between digital transformation and sustainable growth within enterprises, focusing on their economic study at the time-series level. However, the spatial correlations and spillover effects between enterprises are not considered. In the future, the spatial spillover effects of the digital development of listed firms can be investigated using spatial econometric regression models to discuss the spatial correlations between firms.