When Does Digital Transformation Pay Off? Cost Channels and Heterogeneity in Chinese Manufacturing Firms

Digital transformation serves as a key driver of better firm financial performance and a critical enabler of high-quality economic and social development. Using a panel dataset of Chinese A-share listed manufacturing firms over the 2011–2022 period, this study empirically examines how digital transformation affects firm financial performance, along with its transmission mechanisms and heterogeneous effects. We find that digital transformation significantly improves the financial performance of m