Digital Transformation, Financing Constraints, and Corporate Innovation Efficiency: Evidence from Chinese A-Share Listed Companies
Year: 2026
Type: article
Abstract: Digital technologies are reshaping how firms allocate resources to innovation, yet whether digital transformation raises the efficiency with which innovation inputs are converted into outputs remains an open question. Using a panel of Chinese A-share listed companies over 2012–2023 and a two-way fixed effects specification, this study examines the effect of digital transformation on corporate innovation efficiency, measured by a data envelopment analysis (DEA) score built on R&D inputs and patent outputs. Complemented by heterogeneity analyses, a mediation examination and a battery of robustness tests, we uncover three main findings. First, digital transformation significantly improves corporate innovation efficiency, and the result survives alternative efficiency measures, lagged regressors, an instrumental-variable strategy, sub-period analysis and region-by-year fixed effects. Second, the effect is heterogeneous: it is substantially stronger for non-state-owned enterprises, for firms in high-technology industries and for small and medium-sized firms. Third, alleviating financing constraints is a significant mediating channel, accounting for roughly 18% of the total effect. These findings offer implications for firms evaluating the returns to digital investment and for policymakers designing differentiated support for digital transformation.
Authors: Yeong Hong Yi, Dewi Purwati
Language: English
Subfield: Strategy and Management
Domain: Social Sciences
Open Access status: diamond
OpenAlex ID: W7225716706