According to the theory of knowledge-based view, this paper discusses the mechanism by which digital technology application affects corporate innovation efficiency. Innovation often involves mutual integration and re-creation of knowledge in different fields. Enterprises may only achieve more homogeneous innovation results if they rely solely on their own familiar technical experience, which is not conducive to improving innovation efficiency. Therefore, improving innovation efficiency requires acquiring as much innovative knowledge as possible and reducing their acquisition costs. Consequently, this paper suggests that enterprises can benefit from digital technology application both for acquiring external knowledge and reducing cooperative innovation costs, which is conducive to improving innovation efficiency. This paper uses the data from China’s A-share listed companies from 2007 to 2019 to empirically examine the causal relationship between digital technology application and corporate innovation efficiency. The study shows that: First, digital technology application significantly improves innovation efficiency. Second, digital technology application improves innovation efficiency by enhancing their ability to acquire knowledge and promoting cooperative innovation. Third, digital technology application has a greater effect on the innovation efficiency of enterprises with intensive intellectual property and diversified business. In terms of theoretical significance, this paper expands the application boundaries of the knowledge-based view. In the era of the digital economy, digital technology effectively reduces the costs of information search for enterprises and expands the channels for enterprises to acquire knowledge. This paper clarifies the impact of digital technology application on corporate innovation efficiency from the perspectives of knowledge acquisition and cooperative innovation, and reveals the internal mechanism of how digital technology affects innovation efficiency. In terms of practical inspiration, this paper constructs the application indicators of digital technology from four dimensions: digital production, digital management, digital marketing, and digital products, so as to examine whether the application degree of digital technology in different business processes within the enterprise has different impacts on innovation efficiency. It is found that enterprises can only better leverage the promotion effect of digital technology on innovation efficiency by truly integrating digital technology with their own management, production, and business processes, which has strong practical guidance significance for how enterprises can reasonably apply digital technology to improve innovation efficiency.