Abstract
PurposeManufacturers increasingly resort to digital transformation to shape their competitiveness in the digital economy era, while supply chain (SC) collaborative innovation helps them cope with market uncertainties. However, whether and how digital transformation can facilitate SC collaborative innovation remain unclear. To address this gap, we aims to investigate the effects of digital transformation (strategy and capability) on SC collaborative (process and product) innovation and market performance.Design/methodology/approachWe use partial least squares-structural equation modelling (PLS-SEM) with a sample of 210 Chinese manufacturers to investigate the effects of digital transformation (strategy and capability) on SC collaborative (process and product) innovation and market performance.FindingsThe results show that digital strategy and capability positively impact SC collaborative process and product innovation, which enhances market performance. In addition, SC collaborative innovation mediates the relationship between digital transformation and market performance.Originality/valueThis study contributes to the literature by identifying how digital transformation drives SC collaborative innovation towards improving market performance and providing practical guidance for enterprises in promoting digital transformation and SC collaborative innovation.