Jiafeng Xiang , Ge Yang , Yinying Chen , Dong Zhou
{"title":"Business group affiliation and corporate digital transformation","authors":"Jiafeng Xiang , Ge Yang , Yinying Chen , Dong Zhou","doi":"10.1016/j.econmod.2025.107068","DOIUrl":null,"url":null,"abstract":"<div><div>This study explores how business group affiliation (BGA) affects corporate digital transformation (DT), addressing the gap in the DT literature that generally treats firms as independent entities while neglecting the potential impact of their organizational structure. Utilizing data from Chinese privately owned listed firms from 2010 to 2020, we find that BGA has a negative impact on corporate DT, with a less pronounced effect in firms facing lower industry competition and firms with stronger corporate governance. Mechanism analyses show that BGA undermines firms' DT by reducing their risk-taking and exacerbating expropriation by ultimate controllers. Finally, we find that the negative impact of BGA on corporate DT significantly reduces firms' future performance. Overall, our study enhances the understanding of the determinants of corporate DT and provides firms with useful insights for navigating DT initiatives in today's fast-changing digital world.</div></div>","PeriodicalId":48419,"journal":{"name":"Economic Modelling","volume":"147 ","pages":"Article 107068"},"PeriodicalIF":4.7000,"publicationDate":"2025-03-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Economic Modelling","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S026499932500063X","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
This study explores how business group affiliation (BGA) affects corporate digital transformation (DT), addressing the gap in the DT literature that generally treats firms as independent entities while neglecting the potential impact of their organizational structure. Utilizing data from Chinese privately owned listed firms from 2010 to 2020, we find that BGA has a negative impact on corporate DT, with a less pronounced effect in firms facing lower industry competition and firms with stronger corporate governance. Mechanism analyses show that BGA undermines firms' DT by reducing their risk-taking and exacerbating expropriation by ultimate controllers. Finally, we find that the negative impact of BGA on corporate DT significantly reduces firms' future performance. Overall, our study enhances the understanding of the determinants of corporate DT and provides firms with useful insights for navigating DT initiatives in today's fast-changing digital world.
期刊介绍：
Economic Modelling fills a major gap in the economics literature, providing a single source of both theoretical and applied papers on economic modelling. The journal prime objective is to provide an international review of the state-of-the-art in economic modelling. Economic Modelling publishes the complete versions of many large-scale models of industrially advanced economies which have been developed for policy analysis. Examples are the Bank of England Model and the US Federal Reserve Board Model which had hitherto been unpublished. As individual models are revised and updated, the journal publishes subsequent papers dealing with these revisions, so keeping its readers as up to date as possible.
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