Impact of Disruptive Digital Technologies on Long-Term Firm Performance

This study delves into the escalating emphasis on disruptive digital technologies such as cloud computing, big data, AI, and blockchain within management practices. Despite their potential in revolutionizing business models and operational frameworks, a substantial 70% of digital transformation initiatives fail (Tabrizi et al. 2019). The research aims to dissect the multifaceted impacts of these technologies on firm performance, particularly focusing on Chinese listed companies. Using text-mining techniques, we analyze longitudinal data (2010–2022) extracted from annual reports to measure the evolution in developing disruptive digital technologies.

Utilizing a mediator model that accounts for endogeneity in a firm’s organizational change, the study reveals that while disruptive digital technologies offer structural integration and revenue diversification, these aspects appear to have negative impacts on a firm’s long-term performance. We show that developing these technologies pays off only in specific competitive environments. This nuanced understanding challenges the notion of a one-size-fits-all approach to digital transformation.

The research contributes to the digital transformation literature by providing an empirical investigation into the performance implications of disruptive digital technologies and detailing the complex nature of their impacts on organizations. It provides a practical framework for managers, aiding in the development and implementation of effective digital strategies, tailored to specific competitive environments. This study underscores the importance of strategic application and understanding of disruptive technologies in maintaining competitiveness and capturing strategic advantages in the dynamic digital era.