This study investigates how the speed of digital transformation affects firms' competitive positions in product markets, drawing on the theoretical frameworks of first-mover advantage and time-compression diseconomies. It aims to reveal how accelerating digital transformation shapes market competitiveness and through which mechanisms these effects occur.
Using data from 3,299 listed Chinese firms over the period 2008–2023, the study employs multiple empirical models to examine the relationship between digital transformation speed and corporate competitiveness, with a particular focus on mediating and moderating mechanisms.
The results show that faster digital transformation significantly strengthens firms' market competitiveness. This relationship is mediated by lower customer and supplier concentration and by improvements in total factor productivity. Moreover, the positive effects of rapid digital transformation are stronger in state-owned enterprises, firms with limited resource slack and those operating in less marketized regions.
This study enriches the literature by clarifying the dynamic link between the pace of digital adoption and competitive advantage. It highlights the mechanisms and contextual factors underlying this relationship and offers practical guidance for managers assessing how quickly to pursue digital transformation to enhance market positioning.
