From Digital Transformation to Enterprise Value: Absorptive Capacity and the Competitive Environment in Chinese Manufacturing

Luchen Leng; Khunanan Sukpasjaroen; Aroonroj Boonkrong; Rerkchai Fooprateepsiri

doi:10.33152/jmphss-10.4.4

Authors

Luchen Leng Chakrabongse Bhuvanarth International College of Interdisciplinary Studies, Rajamangala University of Technology Tawan-ok, Bangkok, 10400, Thailand
Khunanan Sukpasjaroen Chakrabongse Bhuvanarth International College of Interdisciplinary Studies, Rajamangala University of Technology Tawan-ok, Bangkok, 10400, Thailand
Aroonroj Boonkrong Chakrabongse Bhuvanarth International College of Interdisciplinary Studies, Rajamangala University of Technology Tawan-ok, Bangkok, 10400, Thailand
Rerkchai Fooprateepsiri Chakrabongse Bhuvanarth International College of Interdisciplinary Studies, Rajamangala University of Technology Tawan-ok, Bangkok, 10400, Thailand

DOI:

https://doi.org/10.33152/jmphss-10.4.4

Abstract

Digital transformation has become a central route to manufacturing renewal, yet firms obtain markedly different value outcomes from comparable digital investments. This study develops and tests a dual-driver model in which digital transformation represents an internal strategic driver, Porter’s Diamond Model captures the external competitive environment, and absorptive capacity explains how both drivers are converted into enterprise value. Survey data were obtained from 400 respondents in Chinese manufacturing enterprises and analyzed through descriptive statistics, reliability assessment, exploratory factor analysis, confirmatory factor analysis, and covariance-based structural equation modeling. The measurement model showed strong fit (CMIN/DF = 0.684, RMSEA = 0.000, RMR = 0.013, GFI = 0.980, AGFI = 0.971, CFI = 1.000, TLI = 1.015). The structural model also fitted the data well (CMIN/DF = 1.157, RMSEA = 0.020, RMR = 0.035, GFI = 0.965, AGFI = 0.952, CFI = 0.994, TLI = 0.993). Digital transformation and Diamond Model factors were positively related to enterprise value (β = 0.289 and β = 0.299, respectively) and absorptive capacity (β = 0.576 and β = 0.547). Absorptive capacity showed the strongest direct association with enterprise value (β = 0.412) and transmitted substantial indirect effects from digital transformation (β = 0.237) and Diamond Model factors (β = 0.225). The findings show that enterprise value is not produced by technology adoption or favorable environmental conditions alone. It emerges when manufacturing firms acquire, transform, and exploit knowledge generated by digital initiatives and external ecosystems. The study contributes an integrated internal–external explanation of digital value creation and offers practical priorities for capability building, ecosystem coordination, and policy support.

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