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Digitalization and firm centralization: A quasi-natural experiment based on the “Broadband China” policy

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  • Zhang, Wenzhe
  • Liu, Guangqiang

Abstract

This study investigates whether and how the digitalization affects firm's organizational empowerment structure. To identify causality, we introduce the DID strategy based on the natural experiment, i.e. the “Broadband China” pilot policy, which aim to expand information infrastructure coverage of Chinese cities and improve firm digitalization level. We find that the digitalization has a positive effect on firms’ centralization levels by decreasing their communication costs and improving their productivity. Moreover, this positive effect is more pronounced in SOEs and firms with lower agency costs.

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  • Zhang, Wenzhe & Liu, Guangqiang, 2023. "Digitalization and firm centralization: A quasi-natural experiment based on the “Broadband China” policy," Finance Research Letters, Elsevier, vol. 52(C).
    • Handle: RePEc:eee:finlet:v:52:y:2023:i:c:s1544612322006717
    DOI: 10.1016/j.frl.2022.103495
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    References listed on IDEAS

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    Cited by:

    1. Wu, Kai & Lu, Yufei, 2023. "Corporate digital transformation and financialization: Evidence from Chinese listed firms," Finance Research Letters, Elsevier, vol. 57(C).
    2. Kangjuan Lv & Jiaqi Li & Ye Zhao, 2023. "Can Internet Construction Promote Urban Green Development? A Quasi-Natural Experiment from the “Broadband China”," IJERPH, MDPI, vol. 20(6), pages 1-21, March.

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