Every Coin Has Two Sides: Enterprise Digital Transformation and Symbolic Innovation

Abstract

Despite extensive research on the benefits of enterprise digital transformation (EDT) to innovation, information about its dark side is scarce. Drawing on the resource dependence theory (RDT) and using samples of Chinese listed enterprises from 2010 to 2019, we adopt the double-fixed-effects model, mediation effect model, and moderation effect model to explore how EDT affects symbolic innovation (SI), as well as discussing the moderating roles of government research and development (R&D) subsidies, economic policy uncertainty (EPU), and media coverage (MC). We found that EDT induces SI by increasing executive performance pressure (Pressure) and managerial myopia (Myopia). Such effects are weakened by R&D and EPU but strengthened by MC. Enterprises with higher digital levels and lower substantive innovation levels are more inclined to engage in SI. Our conclusions are still robust after using a series of robustness tests. This study not only sheds light on the role of EDT in stimulating SI, thereby enriching the RDT, but also contributes to optimize decision-making by both business owners and governments.