Digital Technology Deployment and Improved Corporate Performance: Evidence from the Manufacturing Sector in China

With global supply chains being reshaped and costs surging, China’s manufacturing sector faces mounting pressure to retain its position as the world’s largest manufacturing center. Meeting this challenge demands the full mobilization of digital factors, which has attracted increasing academic attention. However, limited research has examined how the effective integration of digital factors with traditional production factors can improve corporate performance. With data on Chinese manufacturing enterprises from the A-share market, this study employs a fixed effect model and a mediating effect model to analyze how the synergies between digital and traditional factors enhance corporate performance. Further, it illustrates the heterogeneous impacts across different types of enterprises. The results reveal three key findings. First, the synergies between digital and traditional factors significantly enhance corporate performance, with digital–capital synergy proving more effective than digital–labor synergy. Second, this synergy promotes performance improvement through three primary mechanisms: strengthening internal control quality, fostering business model innovation, and increasing product differentiation. Third, the performance effects of multi-factor synergies vary considerably across enterprise types, being more pronounced in non-state-owned enterprises, firms with strong digital attributes, and firms without political connections. Overall, this study offers valuable insights for manufacturing firms seeking a competitive edge in high-end and intelligent manufacturing within an increasingly globalized competitive landscape.