Digital Transformation, Talent Development, and Corporate Financial Performance: Multi-Path Evidence from Chinese Manufacturing Firms

Abstract

Digital transformation has become an important driver of organizational development, talent allocation, innovation capacity, and corporate performance. Drawing on dynamic capability theory and innovation theory, this study examines how digital transformation influences corporate financial performance through talent input and innovation output. Using data from Chinese listed manufacturing firms from 2014 to 2023, a multi-path mediation model was constructed and empirically tested. The findings show that digital transformation significantly improves financial performance. However, this effect does not follow the traditional linear pathway of “human resources → innovation → performance.” Although digital transformation promotes the conversion of corporate inputs into innovation outputs, these outputs do not significantly translate into financial performance, indicating a mechanism break. The mediating and chain-mediating effects are not fully supported, suggesting that digital transformation operates through multiple parallel pathways rather than a single progressive mechanism. Heterogeneity analysis further shows that the effect is more significant among state-owned firms. This study provides implications for digital skills development, workforce adaptation, organizational learning, and sustainable enterprise development.