Science Research Management ›› 2022, Vol. 43 ›› Issue (11): 73-82.

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How does digital transformation affect the innovation performance of hub firms?An empirical study from the perspective of modularity

Zheng Shuai1,2, Wang Haijun1   

  1. 1. School of Management, Shenyang University of Technology, Shenyang 110870, Liaoning, China;
    2. School of Economic and Management, Shenyang Institute of Engineering, Shenyang 110136, Liaoning, China
  • Received:2021-12-17 Revised:2022-04-21 Online:2022-11-20 Published:2022-11-18

Abstract:    Digital transformation has upended practical experience over long periods of incremental innovation by changing resources allocation and value-creation logic. Therefore, how to unveil the mechanism between digital transformation and enterprises′ innovation performance has gradually become one of the frontier topics in the study of strategic management of innovation, as well as a key practical problem for enterprises to cope with highly turbulent environment in digital era. Meanwhile, the innovation ecosystem nurtured by digital technology facilities has gradually become the enterprises′ innovation center due to its flexibility and openness. Although existing studies has stated how to establish a platform or business ecosystem based on the digital technology and improve the synergy with complementary partners in terms of the hub firm, specifically, the governance mechanism to inhibit conflicts between stability and generativity of the innovation ecosystem, ignoring the role of the platform′s technological architecture which represents another key means to achieve complementor engagement. In order to bridge the discord between digital technology embedding and traditional business practices, the paper explores the mutual interdependence between technology architecture and governance mechanism, thus theorizes its implications for configurations of hub enterprises′ organizations, which in turn leads to superior performance.
   Drawing on the modularity theory, we proposed the leveraged as well as collaborative mechanism which well mediate the effects of digital transformation on enterprises′ innovation performance, accordingly we construct the chain mediation model, rooted from the research paradigm of "strategy-structure-performance". That is, digital transformation facilitates the leverage mechanism with the modular product architecture of the hub firm, then affects their coordination mechanism enabled by modular organizational architecture, and finally acts on enterprises′ innovation performance. Furthermore, this paper uses Structural Equation Model for empirical test based on 191 samples from hub enterprises of the innovate ecosystem, and thereby tries to propose the dynamic evolution path between technology architecture and governance mechanism from the perspective of dynamic coevolution of modular architecture within and across firm boundaries. 
   The research results demonstrate that: (1) digital transformation exerts a significant positive influence on enterprises′ innovation performance; (2) digital transformation indirectly influences enterprises′ innovation performance by modular product architecture and modular organizational architecture respectively; (3) modular product architecture and modular organizational architecture play a chain mediating effect between digital transformation and enterprises′ innovation performance; and (4) The architecture evolution of modular product architecture and its isomorphic modular organizational architecture is an important structural support for hub enterprises to deal with the challenges of digital transformation in its infancy, and put forward the dual coevolution paths of intra- and inter-firm architecture and governance mechanism, which are starting from intra-firm integral product architecture, and transferring to inter-firm integral product architecture, and ultimately to modular product architecture and its isomorphic modular organizational architecture, or starting from intra-firm integral product architecture, and transferring to intra-firm modular product architecture, and ultimately to modular product architecture and its isomorphic modular organizational architecture respectively. 
   In conclusion, this paper contributes mainly to the existing research from three aspects: First, the study reveals the influence mechanism and economic consequences of the digital transformation, and constructs a chain mediation model to explore the positive influence mechanism between digital transformation and enterprises′ innovation performance, which fills the relevant research gap in empirical research at the micro level. Second, this paper builds a theoretical framework which contains digital transformation strategy, modular architecture and innovation ecosystem, which supplies a new perspective for the theoretical study of digital transformation and innovation ecosystem. Third, this paper enriches the research of the governance mechanism between multiple complementary participants. Moreover, the results suggest that enterprises should build a guarantee mechanism through modular architecture relying on its innovation ecosystem strategically, in order to compete in the digital innovation iteration by a stable core and flexible periphery, and that enterprises should also accumulate experience and skills continuously through the dynamic cycle of "architecture design - leverage coordination - ecological landing - continuous iteration", so as to ensure the integrity, collaboration and sustainability of digital transformation.

Key words: innovation ecosystem, digital transformation, modularity, architecture