Effects of Industry 4.0 technologies and servitization on firm performance: evidence from the Pakistani manufacturing sector

Abstract

PurposeThis study examines the unique effects of Industry 4.0 technologies and servitization on firm performance and explores whether servitization mediates the Industry 4.0 and firm-performance relationship.Design/methodology/approachData were collected from 76 manufacturing firms in Pakistan using an online survey questionnaire. The partial least squares structural equation modeling (PLS-SEM) method was used to test the proposed hypotheses.FindingsAnalysis in SmartPLS revealed significant positive effects of Industry 4.0 and servitization on firm performance and showed that servitization acts as a mediator in the relationship between Industry 4.0 and firm performance.Practical implicationsThis study offers valuable insights for manufacturing firms, particularly in the context of Pakistan, that firms can improve their performance by adopting Industry 4.0 technologies and implementing servitization strategies.Originality/valueDrawing on the practice-based view of firm, this study adds value to the body of knowledge that firms can improve their performance by adopting widely known and transferrable technological and organizational practices like Industry 4.0 and servitization.