Work

Is corporate digital transformation counter-cyclical?

Year: 2024

Type: article

Abstract: In this paper, we assess listed companies in China to empirically examine the relationship between economic cycles and corporate digital transformation. We find that enterprises undergo a higher level of digital transformation during business contraction, and digital transformation exerts a counter-cyclical effect, which is significantly stronger in non-state-owned enterprises and enterprises with a high proportion of low-skilled labor and a high growth level, but significantly weaker in enterprises in financial distress. Digital transformation during periods of contraction can enhance financing accessibility, optimize labor structures and improve corporate governance over the subsequent one to three years. This can alleviate the pressure of economic contraction. Our study contributes to the literature on economic cycles and digital transformation and provides insights enabling governments and enterprises to better understand macroeconomic trends, advance digital transformation and promote high-quality economic development.

Source: China Journal of Accounting Research

DOI: 10.1016/j.cjar.2024.100401

Authors: Shuai Wang, Xi Chen, Qinggang Wang

Institutions: Zhongnan University of Economics and Law, Wuhan Institute of Technology

Language: English

Topic: Digital Economy and Transformation

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: gold

Estimated APC paid: $1,800