Exploring the Impacts of Digital Technology on Small and Medium-Sized Corporate Competitive Advantage: Evidence from the Chinese A-Share Manufacturing Industry

Against the profound backdrop of digital technology reshaping industrial competition, examining how it enables resource-constrained small and medium-sized manufacturing enterprises (SMMEs) to cultivate a sustained competitive advantage is of considerable practical significance. Grounded in dynamic capability theory, this study conducts an empirical analysis using panel data from 153 SMMEs listed on China’s A-share market between 2013 and 2022. The baseline regression results indicate that digital technology significantly enhances firms’ competitive advantage, a finding that remains robust across multiple robustness checks involving alternative variable measurements and sample adjustments. Further heterogeneity analyses reveal that this facilitating effect is more pronounced in state-owned enterprises, non-high-tech sectors, and firms located in eastern, northeastern, and northwestern regions, as well as in environments characterized by more developed digital finance or intensified market competition. Moreover, the mechanism analysis identifies a sequential mediating pathway, specifically that digital process innovation enables digital business model innovation, which is validated through structural equation modeling. Digital product innovation does not exhibit a statistically significant mediating effect. These findings extend the applicability of dynamic capability theory to digital contexts and provide actionable insights for SMMEs seeking to design context-specific digital transformation strategies.