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Board networks and firm's digital transformation: Evidence from China

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  • Fang, Mingyue
  • Li, Ruizhi
  • Wang, Yizhao

Abstract

Digital transformation has become a strategic imperative for contemporary firms, yet the social drivers that facilitate this process remain underexplored. Drawing on social network theory, this study argues that board networks—by providing access to diverse information and critical external resources—serve as a key enabler of firm-level digital transformation. We test this proposition using panel data from China's A-share listed firms between 2008 and 2020. The results show that firms embedded in structurally advantageous board networks exhibit significantly higher levels of digital transformation. We further identify three mechanisms through which board networks promote digital transformation: (1) enhancing firms' capacity for strategic risk-taking, (2) strengthening internal control systems, and (3) facilitating supply chain diversification. Heterogeneity analyses suggest that the effect is stronger among larger firms, firms in less competitive industries, and those with IT-experienced board members. These findings offer new insights into the strategic role of social capital in shaping digital transformation and have practical implications for corporate governance and innovation policy.

Suggested Citation

  • Fang, Mingyue & Li, Ruizhi & Wang, Yizhao, 2026. "Board networks and firm's digital transformation: Evidence from China," Technovation, Elsevier, vol. 152(C).
    • Handle: RePEc:eee:techno:v:152:y:2026:i:c:s0166497226000179
    DOI: 10.1016/j.technovation.2026.103482
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