Navigating uncertainty: The impact of environmental instability on enterprise digital transformation

Feifei Luo and Chia-Hsien Tang

PLOS ONE, 2024, vol. 19, issue 12, 1-22

Abstract: This study investigates the impact of environmental uncertainty on the digital transformation of Chinese A-share listed companies from 2013 to 2022. Our empirical analysis reveals that environmental uncertainty negatively affects digital transformation by inducing managerial myopia, hindering research and development (R&D) investment, and exacerbating financial constraints. However, these negative effects can be mitigated by increasing management shareholding, which aligns managers’ interests with long-term goals, providing digital transformation subsidies to lower financial barriers, and fostering a favorable legal environment to protect digital investments and innovation. These findings offer valuable insights for understanding how environmental uncertainty influences digital transformation strategies and provide practical implications for enterprises and policymakers in dynamic business environments.

Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:plo:pone00:0314688

DOI: 10.1371/journal.pone.0314688

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