The influence of digital transformation on enterprise innovation capability: the intermediary functions of knowledge absorption and R&D cooperation

Digitalisation is reshaping the operational landscape for enterprises, offering new avenues for innovation while simultaneously imposing strategic demands on how firms manage knowledge and collaboration. As digital transformation becomes increasingly central to competitiveness in emerging economies, understanding its nuanced influence on innovation capability – particularly through internal learning processes and external partnerships – is both timely and necessary. Drawing on knowledge management and innovation network theories, this study examines how and under what conditions digital transformation enhances firms’ innovation capability. Using longitudinal survey data from 285 technology innovation enterprises in Guangdong, China, the analysis reveals that digital transformation does not directly boost innovation capability in isolation; rather, its effects are fully mediated by absorptive capacity and R&D cooperation. Furthermore, the size and diversity of a firm’s innovation network serve as important boundary conditions, strengthening the positive effects of knowledge absorption and collaborative R&D on innovation outcomes. These findings offer theoretically grounded and context-sensitive insights for enterprise managers and policymakers seeking to harness digital transformation for sustained innovation in digitally evolving environments.