Digital Transformation, Corporate Innovation, and International Strategy: Empirical Evidence from Listed Companies in China

Abstract

This paper empirically investigates the impact of digital transformation on corporate international strategy. With a dataset of the Chinese stock market from 2014 to 2020, our empirical results reveal that digital transformation has a positive impact on the international strategy of Chinese enterprises. More specifically, firms with digital transformation are more likely to implement international strategy, and firms with a higher degree of digital transformation are associated with a higher level of internationalization. In addition, our empirical results reveal that corporate innovation exhibits the mediation effect. Moreover, our findings show that the impact of digital transformation is more pronounced for private firms and non-high-tech enterprises, and this impact is also moderated by high institutional development in eastern China. Our findings survive numerous robustness checks.