Exploring how digitalization influences incumbents in financial services: The role of entrepreneurial orientation, firm assets, and organizational legitimacy

Dan Zhou, Mika Kautonen, Weiqi Dai and Hui Zhang

Technological Forecasting and Social Change, 2021, vol. 173, issue C

Abstract: The performance implications of digitalization among incumbents in the financial services industry are largely under investigated. To fill this gap, this study adopts the perspective of inertia and explores how the interaction of digitalization with entrepreneurial orientation, firm assets, and organizational legitimacy influences the performance of incumbents in the financial services industry. Using panel data covering listed banks in China during 2007–2019, we find that while digitalization alone does not improve incumbents' performance, the interaction between digitalization and entrepreneurial orientation can contribute to performance as entrepreneurial orientation strengthens. When firm assets are large, digitalization does not contribute to performance, but it does contribute when firm assets are relatively small. The interaction between digitalization and organizational legitimacy undermines incumbents' performance as organizational legitimacy increases. By bridging the entrepreneurship and legitimacy literature using the perspective of inertia, this study identifies the contingency factors affecting the performance implications of the digitalization of financial services industry incumbents, suggesting that they can achieve benefits from digitalization through reductions in inertia.

Keywords: Digitalization; Inertia; Entrepreneurial orientation; Firm assets; Organizational legitimacy; Financial services (search for similar items in EconPapers)
Date: 2021
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0040162521005539
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:tefoso:v:173:y:2021:i:c:s0040162521005539

DOI: 10.1016/j.techfore.2021.121120

Access Statistics for this article

Technological Forecasting and Social Change is currently edited by Fred Phillips

More articles in Technological Forecasting and Social Change from Elsevier
Bibliographic data for series maintained by Catherine Liu ().