The effects of government support on enterprises' digital transformation: Evidence from China

Siwei Wang, Xin Li, Zibiao Li and Yongwei Ye

Managerial and Decision Economics, 2023, vol. 44, issue 5, 2520-2539

Abstract: Digital transformation has become a general trend for enterprises, and it is necessary to investigate the impact of government support on enterprises' digital transformation from the perspective of policy instruments. But so far, there is less empirical evidence on their relationship. Based on Chinese firm‐level data, we investigate the effects of government subsidies and tax incentives on enterprises' digital transformation. The results show that two forms of government support both positively promote enterprises' digital transformation. Moreover, we analyze which factors mediate the observed effects. We demonstrate that easing financial constraints, increasing Research and Development (R&D) investment, and improving risk‐taking ability are underlying mechanisms. Heterogeneity analysis indicates that enterprises that are non‐state‐owned, with higher technology level and higher absorptive capacity, have higher digital transformation. The higher the level of digital finance development and network infrastructure construction in a region, the greater the positive effect of government support on enterprises' digital transformation. The results provide clearer guidance for governments to provide government support so as to stimulate enterprises' digital transformation.

Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
https://doi.org/10.1002/mde.3831

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:wly:mgtdec:v:44:y:2023:i:5:p:2520-2539

Access Statistics for this article

Managerial and Decision Economics is currently edited by Antony Dnes

More articles in Managerial and Decision Economics from John Wiley & Sons, Ltd.
Bibliographic data for series maintained by Wiley Content Delivery ().