Geographical influences, media attention and enterprise digital transformation

Abstract

We investigate how geographic factors influence enterprise digital transformation (EDT) by applying resource dependence theory and the attention-based view. Analyzing spatial and attribute data from Chinese firms between 2011 and 2020, our study reveals three key findings: (1) proximity to major cities positively affects EDT; (2) local enterprise digitalization density (LEDD) mediates the relationship between city proximity and EDT; and (3) media attention has an inverted U-shaped moderating effect on both the relationship between LEDD and EDT, and on LEDD’s mediation effect. Our heterogeneity analysis shows that compared to non-provincial dual-core cities, proximity to major cities has stronger influence on enterprise digital transformation in provincial capitals and first-tier cities. Additionally, the impact of proximity to major cities on EDT is significantly stronger for non-state-owned enterprises and technology-intensive enterprises. Our research broadens the understanding of the spatial dimensions of digital transformation, offering a nuanced theoretical framework that highlights the interplays between geographic and cognitive factors in shaping corporate digital strategy. These insights have valuable implications for policymakers and business leaders seeking to promote enterprise digital transformation.