Purpose This study explores how manufacturing firms in emerging economies develop digital transformation competency (DTC). In asset-heavy traditional manufacturing, digital transformation requires high upfront investment and long payback periods, making sustained motivation indispensable; yet prior DTC conceptualizations have underemphasized this motivational dimension. Accordingly, drawing on the ability–motivation–opportunity (AMO) framework, we conceptualize DTC as a composite of transformation ability, motivation, and opportunity seeking. Building on dynamic capabilities theory, we further consider organizational unlearning as a key antecedent of DTC, examine the mediating role of strategic flexibility, and assess how government support and government ties condition these relationships. Design/methodology/approach A one-year, time-lagged survey of 176 Chinese manufacturing firms was conducted. The survey measured key constructs such as organizational unlearning, strategic flexibility, and DTC. Hierarchical regression analyses were employed to test both direct and moderating effects, as well as the mediation model. Findings Results show that organizational unlearning positively influences DTC, and strategic flexibility serves as a mediator in this relationship. Government support strengthens the positive effect of unlearning on DTC through strategic flexibility, while government ties weaken this link. These findings highlight how certain forms of institutional capital can either facilitate or constrain the development of DTC. Originality/value This study offers fresh insights into the mechanisms through which firms develop essential DTC. The moderating roles of government support and government ties further illuminate boundary conditions for effectively leveraging unlearning and strategic flexibility, thereby extending the literature on digital transformation in emerging economies.
Zhang et al. (2026) studied this question.