Digital Technology-Enabled Dynamic Capabilities and Their Impacts on Firm Performance: Evidence from the COVID-19 Pandemic

To understand whether companies can lock in the benefits of digital technology (DT) usage during the COVID-19 pandemic, we draw on a dynamic capability view to examine how digitalization capabilities generate impacts on firm performance. Through the analysis of 165 Chinese manufacturing companies, we find that market capitalizing agility and operational adjustment agility fully mediate the relationship between digitalization capabilities and firm performance. More interestingly, of the effect size of different mediation paths, market capitalizing agility has the strongest effect. We contribute to the existing information systems literature by revealing the possible mediational mechanisms that can solve the digital dilemma.