The Moderating Roles of R&D on Digital Transformation and Financial Performance: Evidence from Vietnam’s Manufacturing Enterprises

This study investigates the moderating effects of R&D on the association between digital transformation and the financial performance of manufacturing enterprises in a transition economy based on the empirical evidence of 365 enterprises listed on the stock exchange in Vietnam period from 2018–2022. The Generalized Least Squares (GLS) estimation method and Hausman’s test were explored to test the proposed hypotheses. The findings revealed that the more excellent manufacturing enterprises invest in research and development, the greater it drives intense digital transformation and achieves higher financial performance in a transition economy. An interesting finding is that manufacturing enterprises in Vietnam have shown effectiveness in the early stages of digital transformation, mainly due to government support policies. These include capital and tax incentives, digital infrastructure investments, and digital transformation training programs. Such policies have helped reduce financial burdens and accelerate the digital transformation process for Vietnamese manufacturing firms. As a result, the study offers several recommendations for foreign investors considering investments in Vietnam. It is a valuable reference for other countries undergoing digital transformation in contexts similar to Vietnam's.