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Driving corporate innovation through digital transformation: Evidence from China

Year: 2025

Type: article

Abstract: This research investigates how digital transformation (DT) shapes corporate innovation, using data from 1620 Chinese A-share listed firms over the period 2011–2020. We employ the Digital Transformation Index from the CSMAR database, which captures dimensions including strategic leadership, technology application, organizational empowerment, and digital outcomes. Findings first show that DT significantly enhances firms’ innovation output by improving internal control quality, elevating information disclosure, and optimizing human capital structures. Second, strategic leadership and organizational empowerment notably play a more pivotal role in fostering innovation than does the technology-driven approach. Third, DT exerts a more pronounced positive impact in state-owned enterprises (SOEs), manufacturing firms, and high-tech enterprises. These findings deepen our understanding of the mechanisms through which DT propels innovation and offer practical insights for managers seeking to design effective digital strategies.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2025.104649

Authors: Jian Zhang, Jinsong Zhao, Chin-Hsien Yu, Chi-Chuan Lee

Institutions: Xinjiang University, Southwestern University of Finance and Economics

Language: English

Topic: Digital Economy and Transformation

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

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

Open Access status: gold

Estimated APC paid: $1,930