Abstract:    Digital innovation is crucial for enterprises to create long-term value in the digital era. An in-depth exploration of the logic and process of digital innovation decision-making in uncertain business environments holds great significance for understanding how enterprises adapt to environmental changes, seize development opportunities, and achieve sustainable growth in the digital era. This study employed an empirical analysis approach, and utilized the data from A-share listed manufacturing enterprises on the Shanghai and Shenzhen Stock Exchanges in China from 2008 to 2022 to investigate and test the impact of performance expectation gaps on enterprise digital innovation. The findings revealed that organizational operational dilemmas triggered by negative performance feedback led enterprises to reduce digital innovation, while the motivation to avoid potential future losses prompted enterprises to increase digital innovation based on positive performance feedback. Additionally, the intensity of industry competition played a moderating role in the aforementioned relationship. This study has complemented and expanded the analytical framework of enterprise digital innovation from an organizational search perspective, not only contributing a new theoretical explanation mechanism for understanding enterprise digital innovation behaviour but also providing important insights for enterprises to overcome short-sightedness in digital innovation decision-making and for governments to optimize incentive policies for digital innovation.

Key words: digital innovation, performance expectation gap, organizational search, industry competitiveness