Does Digital Transformation Promote Enterprise Development?

Chao Liu, Wei Zhang, Xiangyu Zhu

OAI: oai:igi-global.com:307156 • DOI: 10.4018/JOEUC.307156

With the aim of exploring how digital transformation impacts enterprise development in China, this study takes Chinese A-share listed enterprises from 2007 to 2020 as the research sample and constructs a digital transformation index and an enterprise development index. The impact of digital transformation on enterprise development and its mechanisms are investigated. The empirical results show the following findings. First, digital transformation can significantly promote enterprise development. Second, the effect of digital transformation on enterprise development is stronger in enterprises located in inland regions compared to in coastal regions, and is more powerful in enterprises with high levels of development than in those lagging in development. Third, digital transformation can benefit enterprise development by alleviating financing constraints, effectively reducing business risks, and driving technological innovation. Fourth, China’s economic policy uncertainty is an important external factor weakening the role of digital transformation in driving enterprise development.