Exploring the financial impact of digital transformation: A comprehensive analysis on firms
This study aims for an in-depth exploration into the effects of digital transformation on firms’ financial performance and how this impact can be measured. The research employs a two-stage method to evaluate firms’ digitalization processes. In the first stage, keywords related to digitalization are...
Saved in:
| Main Authors: | , , |
|---|---|
| Format: | Article |
| Language: | English |
| Published: |
Elsevier
2025-09-01
|
| Series: | Journal of Innovation & Knowledge |
| Subjects: | |
| Online Access: | http://www.sciencedirect.com/science/article/pii/S2444569X25001404 |
| Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
| _version_ | 1849225354255794176 |
|---|---|
| author | Melih Sefa Yavuz Hasan Sadık Tatlı Gözde Bozkurt |
| author_facet | Melih Sefa Yavuz Hasan Sadık Tatlı Gözde Bozkurt |
| author_sort | Melih Sefa Yavuz |
| collection | DOAJ |
| description | This study aims for an in-depth exploration into the effects of digital transformation on firms’ financial performance and how this impact can be measured. The research employs a two-stage method to evaluate firms’ digitalization processes. In the first stage, keywords related to digitalization are extracted from annual reports through text mining, and digital transformation strategies in five different sectors are analyzed. Based on these analyses, the return of digitalization (ROD) ratio is developed to assess the effects of digital transformation. In the second stage, a panel data analysis is conducted to examine the impact of digitalization and the ROD ratio on a firm’s performance. The research findings clearly indicate that digital transformation generates positive effects on firms’ financial performance. It also appears that digitalization provides a competitive advantage, particularly in areas such as operational efficiency and brand value. Firms with a high ROD ratio, which can be used as an indicator of digital transformation investments, demonstrate stronger financial performance. The ROD ratio has emerged as a critical indicator that effectively measures the financial outcomes of digital transformation. |
| format | Article |
| id | doaj-art-b3a04f4cda594e508a5bbbb5ff4d4755 |
| institution | Kabale University |
| issn | 2444-569X |
| language | English |
| publishDate | 2025-09-01 |
| publisher | Elsevier |
| record_format | Article |
| series | Journal of Innovation & Knowledge |
| spelling | doaj-art-b3a04f4cda594e508a5bbbb5ff4d47552025-08-25T04:14:37ZengElsevierJournal of Innovation & Knowledge2444-569X2025-09-0110510079510.1016/j.jik.2025.100795Exploring the financial impact of digital transformation: A comprehensive analysis on firmsMelih Sefa Yavuz0Hasan Sadık Tatlı1Gözde Bozkurt2Department of Finance and Banking, Istanbul Beykent University, Cihangir District, Sıraselviler St. No:65, Beyoğlu, Istanbul; Corresponding author.Department of Management Information Systems, Istanbul Galata University., Evliya Celebi District Mesrutiyet St. No:62 Beyoğlu, IstanbulDepartment of Economics, Istanbul Beykent University, Ayazaga District, Hadim Koruyolu St. No:19, Sariyer, IstanbulThis study aims for an in-depth exploration into the effects of digital transformation on firms’ financial performance and how this impact can be measured. The research employs a two-stage method to evaluate firms’ digitalization processes. In the first stage, keywords related to digitalization are extracted from annual reports through text mining, and digital transformation strategies in five different sectors are analyzed. Based on these analyses, the return of digitalization (ROD) ratio is developed to assess the effects of digital transformation. In the second stage, a panel data analysis is conducted to examine the impact of digitalization and the ROD ratio on a firm’s performance. The research findings clearly indicate that digital transformation generates positive effects on firms’ financial performance. It also appears that digitalization provides a competitive advantage, particularly in areas such as operational efficiency and brand value. Firms with a high ROD ratio, which can be used as an indicator of digital transformation investments, demonstrate stronger financial performance. The ROD ratio has emerged as a critical indicator that effectively measures the financial outcomes of digital transformation.http://www.sciencedirect.com/science/article/pii/S2444569X25001404O33L20L25M15 |
| spellingShingle | Melih Sefa Yavuz Hasan Sadık Tatlı Gözde Bozkurt Exploring the financial impact of digital transformation: A comprehensive analysis on firms Journal of Innovation & Knowledge O33 L20 L25 M15 |
| title | Exploring the financial impact of digital transformation: A comprehensive analysis on firms |
| title_full | Exploring the financial impact of digital transformation: A comprehensive analysis on firms |
| title_fullStr | Exploring the financial impact of digital transformation: A comprehensive analysis on firms |
| title_full_unstemmed | Exploring the financial impact of digital transformation: A comprehensive analysis on firms |
| title_short | Exploring the financial impact of digital transformation: A comprehensive analysis on firms |
| title_sort | exploring the financial impact of digital transformation a comprehensive analysis on firms |
| topic | O33 L20 L25 M15 |
| url | http://www.sciencedirect.com/science/article/pii/S2444569X25001404 |
| work_keys_str_mv | AT melihsefayavuz exploringthefinancialimpactofdigitaltransformationacomprehensiveanalysisonfirms AT hasansadıktatlı exploringthefinancialimpactofdigitaltransformationacomprehensiveanalysisonfirms AT gozdebozkurt exploringthefinancialimpactofdigitaltransformationacomprehensiveanalysisonfirms |