Digital Transformation, Financial Efficiency, Financial Effectiveness and Firm Values
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This study investigates the impact of digital transformation on firm values-mediated by financial efficiency and financial effectiveness-among companies listed in the SET100 index from 2019 to 2023. Structural equation modeling (SEM) assesses model fit and tests the hypotheses. The analysis reveals that all goodness-of-fit indices fall within recommended cut-offs, indicating that the hypothesized model adequately reproduces the observed covariance matrix and is suitable for the proposed theoretical framework. Hypothesis tests show that digital transformation significantly enhances financial efficiency, measured by return on assets and return on equity (p < 0.001), and financial effectiveness, reflected in revenue growth and net profit margin (p < 0.001), while also exerting a direct positive effect on firm values (p < 0.001). Both financial efficiency indicators improve firm values (p < 0.01 and p < 0.001, respectively), and revenue growth contributes positively (p < 0.01); however, the effect of net profit margin, though positive, is not statistically significant (p > 0.05). Mediation analysis confirms that financial efficiency and revenue growth significantly mediate the influence of digital transformation on firm values, whereas net profit margin does not-implying that efficient asset utilization, high equity returns, and revenue expansion are the primary drivers of value creation from digital transformation rather than cost control efficiency.
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