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Purpose

This study investigates how and when digital twins (DTs) adoption translates into operational performance.

Design/methodology/approach

Using survey data from 417 Chinese manufacturing firms, mediation and moderated mediation analyses were conducted to examine agile manufacturing as a capability mechanism and supply chain transparency as a boundary condition.

Findings

The results show that DTs adoption improves operational performance through agile manufacturing. However, this capability pathway becomes weaker as supply chain transparency increases.

Originality/value

By integrating dynamic capabilities theory and information processing theory, this study reconceptualizes DTs adoption as a dynamic organizational capability and reveals the contingent nature of DTs-enabled value creation under varying levels of supply chain transparency.

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