Enterprise digital transformation and production efficiency: mechanism analysis and empirical research

• Main Authors: Tao Zhang, Zhan-Zhong Shi, Yi-Rong Shi, Neng-Jun Chen
• Format: Article
• Language: English
• Published: Taylor & Francis Group 2021-09-01
• Series: Ekonomska Istraživanja
• Subjects: enterprise digitisation; mechanism analysis; production efficiency
• Online Access: http://dx.doi.org/10.1080/1331677X.2021.1980731

In the post-industrial period, traditional Chinese enterprises are facing the awkward situation of being ‘big but not strong’, with their core technologies being controlled by others. The digital transformation of enterprises has not only reshaped business models and industrial boundaries, but also boosted the high-quality development of China’s economy. This paper reviews the existing literature and discovers that digital technology promotes enterprise production efficiency through cost reduction, efficiency improvement, and innovation. Based on the data of listed manufacturing companies in the Shanghai and Shenzhen stock exchanges from 2009 to 2017, this paper constructs a differences in differences (DID) model to empirically study the relationship between digital transformation and production efficiency. The results revealed that the implementation of digital transformation plays a significant role in promoting economic benefits and the results of the lag regression method are still robust. Based on this, combined with the actual situation of Chinese enterprises, this paper proposes countermeasures and suggestions to promote the development of enterprise digital transformation. The conclusion is of great significance for Chinese enterprises to occupy a dominant position in the new wave of global industrial revolution.