Does Digital Transformation Enhance the Economic Vitality of Chinese Enterprises? — Evidence from A-Share Listed Companies

With the rapid development of China's digital economy, accelerating digital transformation has become a critical pathway for enterprises to achieve high-quality growth. We identify the digital transformation of enterprises using data mining techniques, leveraging data from the Chinese A-shares market between 2009 and 2019. Both theoretical and empirical perspectives are employed to explain and test the impact of digital transformation on corporate economic vitality and its underlying mechanisms. The findings reveal that digital transformation significantly enhances corporate economic vitality, and this conclusion remains robust after various endogeneity and robustness checks. The mediation analysis indicates that digital transformation primarily boosts corporate economic vitality by reducing transaction costs, improving total factor productivity, and alleviating financing constraints. Heterogeneity analysis based on macroeconomic environments and firm-specific characteristics shows that digital transformation has a stronger effect on promoting economic vitality in regions with higher levels of digital economic development and lower degrees of market segmentation, particularly in capital-intensive state-owned enterprises. The effectiveness of digital transformation is also influenced by corporate governance, with firms benefiting from higher board network centrality and top executives with overseas or financial backgrounds. This study provides valuable insights for enterprises and governments in making decisions regarding digital transformation.