Enterprise Digital Transformation Drivers: Market or Government? A Case Study from China
The relative dominance of government and market forces in enterprise digital transformation remains underexplored. This paper aims to provide new insights into this topic. Using data from China’s A-share-listed companies (2007–2023), we test the short- and long-term impacts of government subsidies a...
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| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
MDPI AG
2025-06-01
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| Series: | Journal of Theoretical and Applied Electronic Commerce Research |
| Subjects: | |
| Online Access: | https://www.mdpi.com/0718-1876/20/2/131 |
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| Summary: | The relative dominance of government and market forces in enterprise digital transformation remains underexplored. This paper aims to provide new insights into this topic. Using data from China’s A-share-listed companies (2007–2023), we test the short- and long-term impacts of government subsidies and market strength on enterprise digital transformation, quantify their relative contributions, explore substitution effects, investigate synergistic interactions, and examine heterogeneous impacts across different enterprise ownership types and life cycle stages, using the fixed effects regression model, exponential smoothing, interaction term, coupling coordination model, and group regression. The results indicate that both government subsidies and market forces drive digital transformation in enterprises, with government subsidies having a slightly stronger effect. There is a substitutive relationship between the two, and their synergy significantly promotes digital transformation. However, their impact varies across different types of enterprises. Stronger market forces do not always lead to greater transformation; in fact, for non-state-owned enterprises, market strength can hinder digital transformation. Similarly, government subsidies do not consistently promote digital transformation. Their effect is less pronounced for growth and maturity-stage enterprises, while declining enterprises are more motivated to pursue digital transformation to benefit from subsidies. |
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| ISSN: | 0718-1876 |