Digital Investment and Asset Utilization Efficiency in Chinese Listed Manufacturing Firms: A Panel Study, 2018-2022

The rapid expansion of the digital economy has increased the need to understand how firm-level digital investment relates to operational efficiency in manufacturing sectors. While existing research primarily examines productivity and profitability outcomes, the relationship between digital investment and asset utilisation efficiency remains insufficiently explored, particularly when measured using direct financial indicators. This study examines the association between digital investment and asset utilisation efficiency in Chinese listed manufacturing firms. Using a balanced panel of 500 firms over the period 2018-2022, digital investment is measured as digital-related expenditure relative to operating income, and asset utilisation efficiency is proxied by the asset turnover ratio. Fixed-effects panel regression models are employed to control for unobserved firm-specific heterogeneity, with additional controls for firm size, leverage, ownership concentration, and research and development intensity. The results show a positive and statistically significant association between digital investment intensity and asset utilisation efficiency. Heterogeneity analysis indicates that this relationship is stronger among larger firms and firms in high-technology industries, while it is not statistically significant for smaller firms. The study contributes by providing firm-level panel evidence using a direct financial measure of digital investment and by identifying conditional efficiency effects across firms and industries. The findings suggest that policies supporting digital investment, particularly for smaller firms and lower-technology sectors, may enhance asset utilisation efficiency.