Research on the Relationship between Digital Transformation and Performance of SMEs

Objective: Through an empirical analysis of the performance of SMEs undergoing digital transformation, this study attempts to identify the influencing factors that determine their sustainable development to provide reference for academic researchers and industrial decision makers. Method: This study first uses an interview method to investigate the impact of SMEs’ three main resources on digital transformation: digital technology, employee digital skills, and digital transformation strategy. Second, we assess the impact of digital transformation on financial performance. Using the structural equation model, 335 valid questionnaires were recovered through the questionnaire method, and the key factors were identified using SPSS and SPSSAU tools. Results: In the Chinese context, digital transformation affects SME performance, and the three resources mentioned above are positively correlated with SMEs’ digital transformation. Digital transformation is positively correlated with performance, and it is the mediator of the impact of digital transformation strategies on performance. Conclusion: For SMEs, focusing on investing in digital technologies, employee digital skills, and digital transformation strategies are three key factors that are beneficial for digital transformation, thus helping to improve performance and maintain their sustainable development.