Pace alignment: The impact of digital orientation on corporate political spending

This study explores how firms in emerging markets balance the benefits of political investments with the risks of excessive government dependence in the digital era. Drawing on resource dependence theory, we argue that firms' digital orientation can serve as an accommodative strategy that buffers political dependence and provides a substitute for proactive political investment. Using longitudinal data collected from Chinese listed firms from 2010 to 2020, we find that digital orientation reflects firms' alignment with government digital priorities, helping them secure resources, legitimacy and autonomy while lowering their reliance on political spending. We also explore how variations in power–dependence dynamics between firms and governments influence the effectiveness of this accommodative strategy. Specifically, the buffering effect is weaker for firms with high outward foreign direct investment or those operating in heavily regulated industries, where political dependence remains strong. In contrast, in regions with greater public attention to digitalization, governments are more likely to rely on digitally oriented firms to demonstrate policy outcomes, thereby enhancing these firms’ political legitimacy. This research deepens understanding of digital strategies in emerging markets and the evolving dynamics of firm-government interdependence.