Does the Digital Transformation of Manufacturing Improve Technological Innovation Capabilities of Enterprises—Empirical Evidence from China

Under the framework of new quality productivity, China emphasizes technological innovation, digital productivity, and green productivity to transform its manufacturing industry toward sustainability. This study empirically analyzes the impact of digital transformation using methods such as fixed effects models, instrumental variable approaches, propensity score matching with difference-in-differences, threshold regression, and quantile regression models. The findings reveal three key insights: (1) Digital transformation significantly enhances enterprise R&D output, R&D investment, and innovation efficiency by integrating digital technology with business processes to unlock innovation potential. (2) Cost stickiness plays a mediating role, as digital transformation reduces cost rigidity, freeing up resources for R&D investment. (3) The impact of digital transformation varies by corporate characteristics—larger, technology-intensive, less asset-intensive, and highly innovative firms show greater innovation gains. These results underscore the potential for Chinese manufacturing firms to adopt digital transformation as a strategy to shift away from extensive development, minimize resource use, and reduce environmental impact, thus achieving green productivity and sustainable growth. The study offers practical implications: Enterprises should actively pursue digital transformation by adopting advanced technologies and optimizing management. Attention to cost stickiness is essential for improving resource allocation and supporting R&D. Finally, firms should tailor digital strategies based on specific attributes, such as size and innovation intensity, to maximize the benefits of transformation.