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Digital transformation, factor flow, and innovation output

Author

Listed:
  • Cui, Fang
  • Liu, Wei

Abstract

Chinese companies have undergone rapid digital transformation. This article investigates how digital transformation influences innovation output. Grounded in a large panel covering all listed companies over a decade, this article finds that digital transformation substantially improves innovation output. In addition, factor flow represents a central economic channel in this relation. The conclusion is supported by a number of econometric checks. Finally, we delineate that the positive effect is larger among small and manufacturing firms. In summary, by generating novel insights into the association between digitalization and innovation, this article complements current innovation and digital transformation research.

Suggested Citation

  • Cui, Fang & Liu, Wei, 2025. "Digital transformation, factor flow, and innovation output," Finance Research Letters, Elsevier, vol. 86(PF).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pf:s1544612325020902
    DOI: 10.1016/j.frl.2025.108836
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    References listed on IDEAS

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