Unlocking the impact of digital technology progress and entry dynamics on firm's total factor productivity in Chinese industries

Junyu Pan, Javier Cifuentes-Faura, Xin Zhao and Xiaoqian Liu

Global Finance Journal, 2024, vol. 60, issue C

Abstract: In today's digital era, technology serves as a fundamental pillar of the digital economy, greatly transforming business models and re-evaluating the enterprises' worth. This theoretical study incorporates digital technology factors into a task-based model to discuss the impact of digital technology advancement and entry price on corporate total factor productivity (TFP) using 2008–2021 data from Chinese-listed companies. The findings show that advances in digital technology considerably help in improving corporate TFP. According to digital technology's pricing strategy, a decrease in the entry price is essential to advancing digital technology and improving TFP. An improvement in corporate management and operational capabilities contributes to incorporating digital technologies at a lower price, thus enhancing corporate TFP. In addition, digital technology advancement generates a heterogeneous TFP effect, which is highlighted in regions with well-protected intellectual property rights, enterprises with high-tech certifications, and nonstate enterprises. These findings demonstrate the empowering effect of emerging technologies on high-quality corporate development and provide strategic insights for companies to achieve digital transformation.

Keywords: Digital technology; Entry price; Total factor productivity; Task-based model; Management capability; Operational capability (search for similar items in EconPapers)
JEL-codes: L22 O33 O41 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:60:y:2024:i:c:s1044028324000292

DOI: 10.1016/j.gfj.2024.100957

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