Economic Policy Uncertainty and Corporate Digital Transformation Empirical Evidence from Chinese Listed Companies

Abstract

In recent years, frequent uncertain events such as the Russia-Ukraine conflict, the COVID-19 pandemic, and the China-US trade war have profoundly impacted the global economy, forcing enterprises to adjust their development strategies accordingly. With the application of emerging technologies such as big data, the Internet of Things, cloud computing, and artificial intelligence, digital transformation has become a source of competitive advantage and an inevitable path for sustainable development for many Chinese enterprises. Based on this, this paper utilizes data from A-share listed companies from 2007 to 2020 to examine the impact of economic policy uncertainty (EPU) on corporate digital transformation. The conclusions are as follows: After a series of robustness tests, baseline regressions indicate that economic policy uncertainty forces corporate digital transformation. Mechanism analysis shows that rising economic policy uncertainty compels digital transformation by increasing corporate R&D investment. Heterogeneity analysis reveals that, against the backdrop of EPU, non-manufacturing firms, state-owned enterprises (SOEs), small enterprises, and firms with separated chairperson and CEO positions exhibit stronger willingness and higher success rates in digital transformation compared to their counterparts. This paper reveals the internal logic of how economic policy uncertainty affects corporate digital transformation, contributing to guiding enterprises in adopting appropriate strategies when facing uncertainty and promoting high-quality enterprise development. It holds significant theoretical value and practical implications.