Abstract
PurposeThe purpose of this study is to investigate the technology-focused and technology-supported dilemmas that firms have encountered and their digital orientation from a nuanced perspective to answer the following research questions: What digital orientations do companies take in launching digital initiatives? How does the choice between a proactive digital orientation (Pro-DO) and a reactive digital orientation (Rea-DO) influence firm value?Design/methodology/approachThe authors adopted machine learning and a quantitative research approach using observations from China’s listed companies from 2010 to 2020 and applied statistical techniques and regression analysis to examine the effect of digital orientation alternatives on firm value.FindingsThe findings of this study indicate that firms with a Pro-DO exhibit a positive effect on firm value. In contrast, firms with a Rea-DO do not demonstrate the same positive relationship with firm value. Additionally, this study reveals that firms with better corporate governance practices and lower financing constraints are more responsive to the positive effects of Pro-DO on firm value.Originality/valueWe elucidate two primary perspectives of digital orientation: Pro-DO and Rea-DO. Additionally, we empirically showcase their nuanced influences on firm value, thereby enriching knowledge in the fields of strategic orientation and digital transformation. Moreover, our findings underscore the importance of corporate governance and financing constraints as moderators.