The association of firms’ digitization determinants and financial performance

Over the last decades, digital transformation has been the most discussed trend in the business world, questioning how it can be utilized to increase performance. This research paper investigates the association between digitization and financial performance, dividing digitization in four themes, namely, it’s adoption speed, adoption scope, the degree of a successful digital strategy and firm’s digital orientation in general. A partial least squares structural equation modelling (PLS-SEM) approach is used, investigating German companies listed in the mDax. Despite not getting statistically significant results, the study finds counter-intuitive tendencies of digitization possibly being harmful for German companies, dependent on the digital channels used. This leads to various implications for practitioners and avenues for future research