Does economic policy uncertainty affect firm digital transformation?

Ding Xing and Kangning Xu

Politická ekonomie, vol. preprint

Abstract: The economic policies of different regions in China vary greatly. This research examines the impact of Chinese provincial economic policy uncertainty (EPU) on firm digital transformation, using panel data from A-share listed firms in China over the period 2007-2021 with high-dimensional fixed effects model. Importantly, we use provincial-level EPU data to explore this impact and discuss the moderating effect of leadership characteristics. We find a U-shaped relationship between provincial EPU and firm digital transformation. Furthermore, we find that the average age and gender of leaders influence the effect of EPU on digital transformation. These results highlight the importance of economic policy consistency in China and encourage firm to improve their board diversity to cope with EPU.

Keywords: Economic policy uncertainty; digital transformation; listed firms; leadership characteristics (search for similar items in EconPapers)
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DOI: 10.18267/j.polek.1543

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