Research On The Impact Of Digital Transformation On Enterprise Performance

With the emergence and continuous development of technologies such as artificial intelligence,cloud computing,and big data,a new generation of information technology is increasingly integrated into the entire process of economic and social development,and mankind has entered the era of digital economy.At present,the global epidemic situation is severe,which has caused a huge impact on China and the global economy.It is obvious to all that the development of the digital economy has played an important role in the prevention and control of the epidemic and the resumption of work and production in the real economy.It not only injects impetus into economic growth,but also becomes a key factor in achieving high-quality development and industrial upgrading.The dynamic and innovative economic form has become the current hot spot.In the Central Economic Work Conference held in 2020,the requirement to vigorously develop the digital economy and strengthen investment in new infrastructure was also clearly put forward.The rise of the digital economy wave has also brought changes to the consumer market.The continuous emergence of new models and new business formats has driven consumption upgrades and promoted economic quality and efficiency.Driven by the ever-changing real environment and relevant policies,as an important microscopic manifestation of the digital economy,the digital transformation of enterprises integrates a large number of advanced digital technologies,which is an important strategic measure for enterprises to seize the commanding heights of competition and achieve innovative development.Therefore,the economic consequences of digital transformation have also attracted the attention of the theoretical and practical circles.However,since the digital transformation of Chinese enterprises is still in its infancy as a whole,although more than half of the enterprises have a relatively clear awareness of digital transformation,at the same time There are still nearly40% of enterprises that have not yet formed a unified understanding of the key areas,technical routes,and resource investment of digital transformation,which makes the role of digital empowerment in enterprise development not fully utilized.Thinking about how to drive the improvement of corporate performance under the penetration of the new generation of digital technology is particularly important to achieve high-quality economic development.The financing,investing and operating activities are related to the sustainable development of enterprises.The financing problem has always been a problem that plagues the development of small and medium-sized enterprises in China,which limits the improvement of enterprise performance.Effective investment and cost stickiness are also key factors affecting enterprise performance.There is currently little literature that precisely combines digital transformation with external financing,investment efficiency,and cost stickiness.The digital transformation of enterprises has released positive signals to the outside world.How will this affect the performance of listed companies? This requires not only a theoretical answer,but also an empirical test based on Chinese institutional background and the latest data.Based on the data of A-share listed companies from 2007 to 2020,this article elaborates the economic consequences of digital transformation from the following three aspects:financing activities,corporate investment,and operating performance.The main questions are:(1)Whether the digital transformation of enterprises can be a mitigation an important hub for information asymmetry between companies and investors? Can investors understand their operating conditions through platform corporate information and reduce information asymmetry to ease financing constraints and reduce financing costs in the company,increase the scale of financing and increase the amount of credit loan?(2)Can digital transformation help improve the internal governance and management decision-making level of enterprises,alleviate information asymmetry,and improve the efficiency of enterprise investment? Are there any asymmetric effects on over-investment and under-investment?(3)Can digital transformation reduce management’s pursuit of personal gains such as "empire building" and curb cost stickiness? And how does it affect corporate performance? Finally,the article combines the status quo and main research conclusions of digital transformation in China,and puts forward relevant policy recommendations from four aspects: policy-making institutions,investors,listed companies,and capital market improvement.Provide certain reference and reference for efficiency and effectiveness,to help listed companies release their potential in digitalization,to promote their sustainable development.It provides a certain reference for improving the information disclosure system,establishing an all-round supervision system,and promoting the positive development of the capital market.The main research contents and conclusions of this paper are as follows:First,in the research on the impact of digital transformation on debt financing performance,tests were carried out from the dimensions of debt financing scale,debt financing cost,equity financing cost,and debt financing nature and structure.The results showed that:(1)Digital transformation is positively related to debt financing.That is,digital transformation can effectively reduce the information asymmetry between enterprises and financial institutions,and help improve the company’s financing status.Further research found that the relationship between digital transformation and debt financing will be affected by the company’s characteristics and external environmental factors: When the financial marketization of the company’s environment is higher,the equity is more dispersed,and the information environment is better,the effect of digital transformation on improving debt financing is more obvious.After replacing the measures of debt financing,considering the impact of the financial crisis and endogeneity issues,the findings remain the same.The mechanism test shows that digital transformation affects the debt financing of enterprises by increasing the attention of analysts.(2)The empirical test of digital transformation on financing cost finds that digital transformation is significantly negatively correlated with debt financing cost,and it is also significantly negatively correlated with equity financing cost.Further testing shows that the relationship between digital transformation and external financing costs is also affected by corporate characteristics and external governance factors,and the degree of financial marketization and the shareholding ratio of institutional investors have a moderating effect on the relationship between digital transformation and external financing costs.The negative correlation between digital transformation and external financing costs is more significant in companies with a high degree of financial marketization and a high proportion of institutional investors.After changing the measurement method of financing costs,considering the impact of the financial crisis and endogenous problems,the research found that digital transformation can still reduce external financing costs.(3)Regarding the impact of digital transformation on the nature and structure of loans,empirical tests found that digital transformation is significantly positively correlated with credit loans,indicating that digital transformation can improve the efficiency of information processing and transmission,help alleviate information asymmetry between enterprises and banks,and help companies get more credit.Further analysis shows that the positive correlation between digital transformation and credit loans is more significant in state-owned enterprises and enterprises with high audit quality.The mechanism test shows that digital transformation affects the credit loan of enterprises by improving the quality of information disclosure.Second,in the research on the impact of digital transformation on enterprise investment,the study found that digital transformation is significantly positively correlated with the scale of enterprise investment and investment efficiency,that is,digital transformation will significantly improve the scale and efficiency of enterprise investment.The relationship between digital transformation and investment efficiency is affected by company characteristics,and agency costs and financing constraints have a negative moderating effect on the relationship.When the agency cost of the enterprise is lower and the financing constraints are lower,the effect of digital transformation on the investment efficiency of the enterprise is more significant.After dividing investment efficiency into two dimensions of over-investment and under-investment,the results of further analysis show that digital transformation does not have a significant impact on over-investment,but it will significantly inhibit under-investment.The relationship has a negative moderating effect,but the moderating effect on the relationship between digital transformation and over-investment is not significant,that is,the improvement of digital transformation on under-investment is more obvious in cash-strapped enterprises,because digital transformation can help reduce the information asymmetry between enterprises and the market,thereby obtaining external financing and improving investment efficiency.The mechanism test shows that digital transformation improves the investment efficiency of enterprises by improving financial stability and reducing financing costs.Third,in the research on the impact of digital transformation on business performance,the study found that digital transformation is significantly negatively correlated with cost stickiness,that is,digital transformation will significantly inhibit cost stickiness.The relationship between digital transformation and cost stickiness is affected by company characteristics.The nature of property rights has a negative moderating effect on the relationship between digital transformation and business performance,while agency costs have a positive moderating effect on the relationship.When the agency cost of the enterprise is smaller or when the company is a state-owned enterprise,the effect of digital transformation on cost stickiness is more significant.The mechanism test found that cost stickiness played an intermediary role in the process of digital transformation affecting business performance.After introducing a moderating mediation effect model in further analysis,the research found that managerial ability plays a positive moderating role in the mechanism of digital transformation on business performance.When managerial ability is strong,the promotion of business performance will be significantly enhanced.In general,the above conclusions indicate that digital transformation will have an important impact on business performance.The possible innovations of this article are:First,the research perspective is novel,which is different from the existing literature focusing on the economic consequences of digital transformation.This article innovatively incorporates digital transformation and corporate financing activities,investment activities and business activities into the analysis framework,analyzing the impact of digital transformation on different aspects of corporate performance.The literature provides a novel research perspective on the economic consequences of digital transformation.Second,the research in this article combines digital transformation with enterprise financing,investment efficiency and cost stickiness and conduct heterogeneity testing based on corporate characteristics and external environment.The research in this article opens up the "black box" of the mechanism between digital transformation and financing performance,investment performance,and business performance.It provides a theoretical basis for explaining the role of digital transformation in promoting corporate performance.Third,the research has deepened the understanding of the impact of digital technology application on corporate business behavior.Previous studies have mostly investigated the impact on corporate financing,investment,and operating performance from the perspectives of macro policies,executive characteristics,and external supervision but little attention has been paid to the relationship between digital transformation and corporate financing,investment efficiency,and operating performance.The research of this article innovatively found that digital transformation significantly reduces the financing costs of enterprises,increases credit loans,and improves investment efficiency and operating performance.It provides empirical evidence from countries in transition and the application of digital technology to influence corporate behavior.At the same time,the research also provides a reference for the government to guide corporate digital transformation policy formulation and investor decision-making.