Corporate Decision on Digital Transformation: The Impact of Non-Market Factors

Abstract

This multiple regression study investigated the relationship between the political network and the adoption of digital transformation strategy and if moderated by perceived corruption and political ideology of top managers among diverse enterprises in China. The aim of this study is to contribute to strategic management research on non-market factors of digital transformation. The instruments used for the study were political network relationships, digital transformation strategies, perceived corruption, economic conservatism, cultural conservatism, social conservatism, and meritocracy of top managers. A basic regression model is a causality test between the political network and digital transformation. In addition, moderated multiple regression analysis with factor analysis to analyze moderator variables perceived corruption and political ideology and their interaction with the political network and effect on digital transformation. The study included 214 firms as a convenience sample. Practical significance indicates that the firm with a higher level of political network relationships is more likely to conduct digital transformation and the higher level of top manager’s perceived corruption and economic conservatism mitigates the positive impact of the political network on digital transformation, while the higher level of top manager’s meritocracy tendency strengthens the positive impact of the political network on digital transformation.