How Digital Transformation Affected Corporate Innovation: Evidence from Chinese Listed Firms

Huanyan Shi; Shuyu Yu; Yiyi Zhang

doi:10.6918/IJOSSER.202512_8(12).0004

Authors

Huanyan Shi
Shuyu Yu
Yiyi Zhang

DOI:

https://doi.org/10.6918/IJOSSER.202512_8(12).0004

Keywords:

Digital transformation, Corporate innovation, Patent applications, Industry heterogeneity, Regional inequality

Abstract

This study examines how digital transformation affects corporate innovation using panel data from 5,086 Chinese listed companies over 2007-2022. We measure digital transformation through intangible assets related to networks, software, intelligent platforms, and management systems disclosed in financial reports. Using two-way fixed effects models with lagged variables, we find that digital transformation increases patent applications by 0.277. However, effects vary significantly across contexts: technology-intensive industries show coefficients of 0.839 compared to 0.170 in labor-intensive sectors, while Eastern China (0.293) substantially outperforms Western regions (0.155). These findings suggest digital transformation may exacerbate existing inequalities between industries and regions rather than reduce them, highlighting the importance of complementary assets and capabilities for realizing innovation benefits from digitalization investments.

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