Digital transformation's impact on innovation in private enterprises: Evidence from China

Authors

Li Chen
Ruixiang Tu
BoXuan Huang
Haiyan Zhou, The University of Texas Rio Grande Valley
Yumei Wu

Document Type

Article

Publication Date

6-2024

Abstract

In the digital economy era, the pathways of digital transformation and intelligent development have emerged as crucial avenues for enterprises’ high-quality development. Focusing on listed private enterprises from 2011 to 2020, this study uses text mining to extract keywords related to digital transformation, as disclosed in annual reports. We construct a digital transformation index and empirically examine its impact on enterprise innovation and innovation incentive policies’ synergistic effects. The results demonstrate that digital transformation significantly promotes innovation in private enterprises, with a more pronounced catalytic effect in economically developed regions characterised by higher levels of the digital economy and larger enterprises. Simultaneously, innovation incentive policies play a crucial role in enhancing digital transformation's impact on innovation in private enterprises. Further investigation reveals that digital transformation's impact mechanism on private enterprise innovation is driven primarily by four paths—specifically improving information transparency, reducing operational risks, alleviating financing constraints, and enhancing total factor productivity. This study provides empirical evidence regarding innovation breakthroughs and driving paths for private enterprises to achieve high-quality development as well as valuable references and insights for policy formulation.

Comments

Under a Creative Commons license http://creativecommons.org/licenses/by-nc-nd/4.0/

Recommended Citation

Chen, L., Tu, R., Huang, B., Zhou, H. and Wu, Y., 2024. Digital transformation's impact on innovation in private enterprises: Evidence from China. Journal of Innovation & Knowledge, 9(2), p.100491. https://doi.org/10.1016/j.jik.2024.100491

Creative Commons License

This work is licensed under a Creative Commons Attribution-NonCommercial-No Derivative Works 4.0 International License.

Publication Title

Journal of Innovation & Knowledge

DOI

10.1016/j.jik.2024.100491