Digital　technology　has　a　significant　influence　on　future　economic　growth.　Achieving　catch-up　in　the　context　of　digital　development　is　crucial　for　firms.　However,　the　mechanisms　between　firms’　digital　technology　adoption　(DTA)　and　catch-up　are　underexplored.　Based　on　panel　data　of　A-share　listed　manufacturing　firms　in　China　from　2012　to　2021,　this　study　investigates　the　impact　of　DTA　on　firms’　technological　catch-up　(TC)　and　market　catch-up　(MC)　from　theoretical　and　empirical　perspectives.　The　following　findings　are　drawn.　(1)　DTA　positively　and　significantly　affects　firms’　TC　and　MC,　and　the　results　remain　valid　after　using　the　instrumental　variables　method,　propensity　score　matching,　and　other　robustness　tests.　After　removing　the　order-of-magnitude　discrepancies　and　dimensions,　DTA　had　a　more　significant　effect　on　MC　than　TC.　(2)　Dynamic　capacity　mediates　the　relationship　between　DTA　and　firms’　catch-up.　(3)　The　heterogeneity　analysis　finds　that　DTA　influences　TC　and　MC　in　state-owned　enterprises　and　high-tech　firms　more　significantly.　This　study　provides　a　new　perspective　on　firms’　catch-up　and　guides　for　firms　to　develop　effective　DTA　and　catch-up　strategies.　©　2024　Informa　UK　Limited,　trading　as　Taylor　&　Francis　Group.