Publication Type

PhD Dissertation

Version

publishedVersion

Publication Date

1-2026

Abstract

With the acceleration of digital transformation, improving firm performance in complex and dynamic market environments has become a central challenge for companies. This study examines the effects of executives’ social networks and firms’ digital capabilities on firm performance. Further, it investigates the moderating roles of digital capabilities and environmental dynamism in these relationships. Using panel data for Chinese listed firms from 2005 to 2024, we conduct empirical analyses with fixed-effects models. The results indicate that executives’ political, business, and academic networks all contribute positively to firm performance, underscoring the importance of executives’ social networks in resource acquisition, information flows, and opportunity recognition, and providing empirical support for social capital theory. In addition, firms’ digital capabilities exhibit a significantly positive effect on firm performance, lending support to the argument that digital transformation enhances innovation capacity, operational efficiency, and market adaptability.

Regarding moderation effects, stronger digital capabilities amplify the positive impact of political networks on firm performance, but attenuate the positive effects of business and academic networks. This pattern suggests that enhanced digital capabilities enable firms to leverage political ties to secure more distinctive government-related resources and policy support, thereby improving performance. By contrast, digital capabilities allow firms to bypass business and academic networks and access market resources more directly, generating a substitution effect that weakens the performance contribution of these two network dimensions. The findings further show that while strengthening digital capabilities improves firm performance under low environmental dynamism, under high environmental dynamism, greater digital capabilities are associated with lower return on assets and earnings per share. This implies that in highly uncertain and rapidly changing markets, digital transformation may entail substantial costs and risks that can adversely affect short-term financial outcomes. Accordingly, firms operating in highly dynamic environments should carefully balance investments in digital capability development with potential risks and maintain strategic flexibility. Overall, this study contributes to the literature by revealing the complex mechanisms through which executives’ social networks, digital capabilities, and environmental dynamism jointly shape firm performance and by offering theoretical and practical implications for performance improvement during digital transformation.

Keywords

social networks, digital capabilities, firm performance, environmental dynamism

Degree Awarded

Doctor of Business Admin

Discipline

Business Administration, Management, and Operations | Strategic Management Policy

Supervisor(s)

WANG, Heli

First Page

1

Last Page

133

Publisher

Singapore Management University

City or Country

Singapore

Copyright Owner and License

Author

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