{"title":"Digital transformation and its effect on resource allocation efficiency and productivity in Chinese corporations","authors":"Weijie Jiang, Jiaye Li","doi":"10.1016/j.techsoc.2024.102638","DOIUrl":null,"url":null,"abstract":"<div><p>Digital technology improves the capacity for collecting, processing, and sharing information, enabling corporations to optimize resource allocation. Based on data from Chinese A-share listed corporations between 2008 and 2020, the study investigates the relationship between digital transformation and resource reallocation. The findings indicate that digital transformation significantly enhances the allocation efficiency of capital and labor. Specifically, doubling the frequency of digital transformation terms can correct capital input deviation by approximately 9.5 % and labor input deviation by around 7.3 %. The enhancement primarily stems from mitigating excessive input inefficiencies, while demonstrating insignificant effects on underinvestment scenarios. Moreover, these results are consistent across an array of robustness tests, including Bartik IV and difference-in-differences strategy using the “Broadband China” policy as a quasi-natural experiment. Mechanism analysis reveals that alleviating external information frictions and enhancing internal information utilization constitute the primary channels through which digital transformation fosters resource allocation efficiency. Furthermore, digital transformation not only raises the overall total factor productivity (TFP) through resource reallocation but also directly fosters the growth of corporate TFP.</p></div>","PeriodicalId":47979,"journal":{"name":"Technology in Society","volume":null,"pages":null},"PeriodicalIF":10.1000,"publicationDate":"2024-06-19","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Technology in Society","FirstCategoryId":"90","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S0160791X24001866","RegionNum":1,"RegionCategory":"社会学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"SOCIAL ISSUES","Score":null,"Total":0}
引用次数: 0
Abstract
Digital technology improves the capacity for collecting, processing, and sharing information, enabling corporations to optimize resource allocation. Based on data from Chinese A-share listed corporations between 2008 and 2020, the study investigates the relationship between digital transformation and resource reallocation. The findings indicate that digital transformation significantly enhances the allocation efficiency of capital and labor. Specifically, doubling the frequency of digital transformation terms can correct capital input deviation by approximately 9.5 % and labor input deviation by around 7.3 %. The enhancement primarily stems from mitigating excessive input inefficiencies, while demonstrating insignificant effects on underinvestment scenarios. Moreover, these results are consistent across an array of robustness tests, including Bartik IV and difference-in-differences strategy using the “Broadband China” policy as a quasi-natural experiment. Mechanism analysis reveals that alleviating external information frictions and enhancing internal information utilization constitute the primary channels through which digital transformation fosters resource allocation efficiency. Furthermore, digital transformation not only raises the overall total factor productivity (TFP) through resource reallocation but also directly fosters the growth of corporate TFP.
期刊介绍:
Technology in Society is a global journal dedicated to fostering discourse at the crossroads of technological change and the social, economic, business, and philosophical transformation of our world. The journal aims to provide scholarly contributions that empower decision-makers to thoughtfully and intentionally navigate the decisions shaping this dynamic landscape. A common thread across these fields is the role of technology in society, influencing economic, political, and cultural dynamics. Scholarly work in Technology in Society delves into the social forces shaping technological decisions and the societal choices regarding technology use. This encompasses scholarly and theoretical approaches (history and philosophy of science and technology, technology forecasting, economic growth, and policy, ethics), applied approaches (business innovation, technology management, legal and engineering), and developmental perspectives (technology transfer, technology assessment, and economic development). Detailed information about the journal's aims and scope on specific topics can be found in Technology in Society Briefings, accessible via our Special Issues and Article Collections.