Breaking barriers to innovation: The power of digital transformation

Yuhao Niu, Wen Wen, Sai Wang and Sifei Li

Finance Research Letters, 2023, vol. 51, issue C

Abstract: This study analyzes the impact of digital transformation on corporate innovation. Based on a sample of Chinese listed companies during 2007-2019, we find that digital transformation has a positive impact on corporate innovation. Mechanism tests show that digital transformation helps alleviate corporate financial constraints and improve corporate governance, thus breaks barriers to corporate innovation. Heterogeneity analysis reveals that the positive impact of digital transformation on corporate innovation is more pronounced in high-tech industries and in industries with more intense competition. These findings enrich the growing literature on the economic consequences of digital transformation and have policy implications for promoting corporate innovation.

Keywords: Digital transformation; Corporate innovation; Financial constraints; Corporate governance; Industry heterogeneity (search for similar items in EconPapers)
JEL-codes: G30 O31 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (39)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:51:y:2023:i:c:s154461232200633x

DOI: 10.1016/j.frl.2022.103457

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