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Following the trend or not? How does peer pressure affect firm’s digital transformation

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  • Yang, Na
  • Chen, Xuanyu

Abstract

Although digital transformation has the potential to bring distinct competitive advantages to firms and has become a prominent trend, many firms have not yet shown interest in it. The extant literature primarily offers fragmented explanations for why firms follow or resist the digital transformation trend, but fails to provide a comprehensive understanding. By integrating institutional theory and the awareness-motivation-capability (AMC) framework, we offer a comprehensive perspective for analyzing the effect of institutional pressure on firms’ digital transformation and its boundary conditions. We develop a conceptual model proposing that: (1) firms are more likely to implement digital transformation when they become aware of the peer pressure from industry rivals; (2) firms with a high level of risk propensity are more likely to initiate digital transformation in response to peer pressure; (3) a CEO with IT expertise increases the likelihood of the firm following the digital transformation trend under peer pressure. Using a sample of 3022 Chinese A-share firms from 2009 to 2019, we find empirical support for our hypotheses.

Suggested Citation

  • Yang, Na & Chen, Xuanyu, 2026. "Following the trend or not? How does peer pressure affect firm’s digital transformation," Journal of Business Research, Elsevier, vol. 205(C).
    • Handle: RePEc:eee:jbrese:v:205:y:2026:i:c:s0148296325007003
    DOI: 10.1016/j.jbusres.2025.115877
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