Hand in hand or left behind: The dual impact of leading firms’ digital technologies on industry digital transformation

Chuanhui Liu, Zhongyuan Sheng, Xuetong Hu and Chunxiao Tian

The North American Journal of Economics and Finance, 2025, vol. 75, issue PA

Abstract: This study, utilizing Chinese listed companies from 2007 to 2022, reveals that enterprises can improve their digital transformation strategies by learning from the digital technologies of industry-leading companies. By free-riding on technology adoption, enterprises can reduce their R&D investments in implementing digital transformation projects, as existing digital technologies can be copied and improved for their own use. Furthermore, we find that firms with stronger research capabilities are more efficient at learning from leading firms’ digital technologies. Better digital technologies not only optimize a firm’s strategic plan for digital transformation but also enhance the actual implementation of such projects. This enhancement is achieved by easing financing constraints and diversifying the upstream chain. Our findings are robust to alternative variable measures and endogeneity tests. Overall, we highlight the technological spillovers of digital technology innovations by leading firms, facilitating a deeper digital transformation of other firms through various governance channels.

Keywords: Digital technology; Digital transformation; Technology adoption hitchhiker (search for similar items in EconPapers)
JEL-codes: G31 G34 O16 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:75:y:2025:i:pa:s1062940824002304

DOI: 10.1016/j.najef.2024.102305

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