Reconstructing Digital Transformation Capabilities: A TOE-Dynamic Capability Perspective with Digital Finance as a Boundary Enhancer

In the face of accelerating digital disruption, understanding how firms build robust digital transformation capabilities (DTC) has become a critical research and managerial concern. This study integrates the Dynamic Capability Theory and the Technology–Organization–Environment (TOE) framework to propose a dual-path model that distinguishes between external sensing and internal reconfiguration mechanisms. Drawing on survey data from 502 manufacturing firms in China, we empirically examine how sustainable strategy, network structure, digital innovation, and cultural flexibility influence DTC, and how DTC subsequently enhances enterprise performance. We further introduce digital finance as a boundary-enhancing tool that moderates key transformation pathways. The results reveal that while all four antecedents positively affect DTC, the strength and significance of their effects vary. Notably, digital finance demonstrates both amplifying and substitutive moderating effects, enhancing the performance impact of DTC but weakening the effect of digital innovation on outcomes. These findings enrich the structural understanding of capability formation and shed light on the contingent role of fintech infrastructure. Theoretical and practical implications for dynamic capability development in digital contexts are discussed. JEL Codes L21 – Business Objectives of the Firm O32 – Technological Innovation and R&D G23 – Non-bank Financial Institutions; Financial Instruments D83 – Search; Learning; Information and Knowledge M15 – IT Management