Digital maturity and business performance in industry 4.0: evidence from industrial firms in Portugal's Dão Lafões region

Purpose Digital maturity in the context of Industry 4.0 has become a key driver for enhancing industrialization and overall business performance in the manufacturing sector. However, limited understanding remains regarding how the different pillars of digital maturity affect organizational and financial outcomes. This study investigates the influence of these pillars on key business performance indicators. Design/methodology/approach A conceptual framework was developed to support the primary research hypotheses. A survey was conducted with 140 manufacturing companies in the Dão Lafões region (Portugal), assessing subdimensions of digital maturity. Business performance data (ROA, debt, interest rate, productivity and Internationalization) were retrieved from the Iberian Balance Sheet Analysis System. Responses were collected through face-to-face interviews with managers, ensuring high-quality and context-rich data. Multiple linear regression models and robust statistical tests ensured the reliability of the results. Findings Digital maturity has significant but heterogeneous effects on performance. Strategy and data analytics negatively affect ROA and productivity, while existing competencies positively influence internationalization. Strategy is also associated with higher debt. Other subdimensions show marginal effects on internationalization, debt, and interest rate. Practical implications This study advances both the Industry 4.0 and performance management literature by demonstrating how distinct digital maturity pillars exert heterogeneous effects on operational and financial indicators. The findings refine existing maturity frameworks by showing that early-stage I4.0 adoption may generate negative short-term impacts, underscoring the need for phased, capability-driven digital transformation strategies in SME-dominated regions. Originality/value This study contributes to the literature on Industry 4.0 by providing empirical evidence on the differentiated effects of digital maturity subdimensions on business performance. It offers practical insights for policymakers and business leaders seeking to optimize digital transformation strategies, particularly in SME-dominated industrial regions.