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In the contemporary and perpetually changing environment, firms have transformed their business models by integrating advanced digital technologies in which their capabilities contribute crucially. This has evoked competition and challenges especially for small and medium-sized enterprises (SMEs). Therefore, the research aimed to analyze the mediating effect of information technology (IT) capability between digital business strategy and firms’ efficiency. The case of Chinese SMEs was considered specifically. The research was quantitative; therefore, the sample comprised 351 participants accumulated using a survey questionnaire. The mediating effect was tested using structural equation modeling (SEM) where partial mediation of the IT capability was found only in terms of IT proactive stance. Therefore, the research has certain managerial implications specifically in terms of proactive stance as the managers need to initiate the transformation within for efficient performance.

Multidimensional Perspective of Firms’ IT Capability Between Digital Business Strategy and Firms’ Efficiency: A Case of Chinese SMEs