IDEAS home Printed from https://ideas.repec.org/a/plo/pone00/0292972.html
   My bibliography  Save this article

Digital transformation and total factor productivity: Empirical evidence from China

Author

Listed:
  • Zhonghao Lei
  • Dongmei Wang

Abstract

Digital transformation plays a crucial role in improving the quality development of companies in this era of digital economy with ever-changing technologies. This paper empirically investigates the impact of corporate digital transformation on total factor productivity and the mechanism of action, using A-share listed companies in Shanghai and Shenzhen from 2011–2021 as the research sample, and found that the digital transformation of companies significantly improves total factor productivity, with the plausibility of the findings being verified by a series of robustness tests. Based on the heterogeneity study, it is found that such effect is stronger for private companies, non-high-tech companies, and companies with a high degree of industry competition. The mechanism test indicates that digital transformation facilitates total factor productivity through four ways: strengthening company technological innovation, reducing operational costs, increasing resource allocation efficiency, and improving human capital structure. The findings of this paper support a better understanding of the micro effects of digital transformation and provide empirical evidence for policy formulation and adjustment.

Suggested Citation

  • Zhonghao Lei & Dongmei Wang, 2023. "Digital transformation and total factor productivity: Empirical evidence from China," PLOS ONE, Public Library of Science, vol. 18(10), pages 1-18, October.
    • Handle: RePEc:plo:pone00:0292972
    DOI: 10.1371/journal.pone.0292972
    as

    Download full text from publisher

    File URL: https://journals.plos.org/plosone/article?id=10.1371/journal.pone.0292972
    Download Restriction: no
    File URL: https://journals.plos.org/plosone/article/file?id=10.1371/journal.pone.0292972&type=printable
    Download Restriction: no
    File URL: https://libkey.io/10.1371/journal.pone.0292972?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Nicholas Bloom & Luis Garicano & Raffaella Sadun & John Van Reenen, 2014. "The Distinct Effects of Information Technology and Communication Technology on Firm Organization," Management Science, INFORMS, vol. 60(12), pages 2859-2885, December.
    2. DeCanio, Stephen J., 2016. "Robots and humans – complements or substitutes?," Journal of Macroeconomics, Elsevier, vol. 49(C), pages 280-291.
    3. Mary J. Benner & Joel Waldfogel, 2023. "Changing the channel: Digitization and the rise of “middle tail” strategies," Strategic Management Journal, Wiley Blackwell, vol. 44(1), pages 264-287, January.
    4. Nasiri, Mina & Ukko, Juhani & Saunila, Minna & Rantala, Tero, 2020. "Managing the digital supply chain: The role of smart technologies," Technovation, Elsevier, vol. 96.
    5. Margherita Pagani & Catherine Pardo, 2017. "The impact of digital technology on relationships in a business network," Post-Print hal-02312032, HAL.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Jian & Yu, Chin-Hsien & Zhao, Jinsong & Lee, Chi-Chuan, 2025. "How does corporate digital transformation affect green innovation? Evidence from China's enterprise data," Energy Economics, Elsevier, vol. 142(C).
    2. Qi Zhang & Jinghuai She, 2024. "Digital transformation and corporate tax avoidance: An analysis based on multiple perspectives and mechanisms," PLOS ONE, Public Library of Science, vol. 19(9), pages 1-30, September.
    3. Luo, Yuke & Liu, Shiyuan & Zhang, Yang & Zeng, Miao & Zhao, Dandi, 2025. "Digital pathways to resilience: Assessing the impact of digitalization on agricultural production resilience in China," China Economic Review, Elsevier, vol. 90(C).
    4. Yujiao Bai & Hao Zhang, 2024. "Research on the impact of enterprise mergers and acquisitions on technological innovation: An empirical analysis based on listed Chinese enterprises," PLOS ONE, Public Library of Science, vol. 19(11), pages 1-24, November.
    5. Ruixvan Gao & Jialun Lyu, 2025. "Research on the mechanism of digital drive economy enhancing quality and efficiency," PLOS ONE, Public Library of Science, vol. 20(2), pages 1-13, February.
    6. Xiao, Bingyu & Gong, Guangming & Xiao, Liang, 2025. "Does the work experience of regulatory leaders at local companies affect the productivity of state-owned enterprises? Evidence from China," Economic Modelling, Elsevier, vol. 145(C).
    7. Ren, Yuheng & Zhang, Jue & Wang, Xin, 2024. "How does data factor utilization stimulate corporate total factor productivity: A discussion of the productivity paradox," International Review of Economics & Finance, Elsevier, vol. 96(PC).
    8. Xiao, Zhongyi & Li, Yuanling & Xiang, Cheng, 2025. "Do suppliers value customer firms' digital transformation? Evidence from trade credit provision," International Review of Financial Analysis, Elsevier, vol. 99(C).
    9. Zhang, Li & Song, Xinwei, 2025. "Managerial overconfidence and corporate digital transformation," Finance Research Letters, Elsevier, vol. 75(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Shibin & Wang, Qian, 2023. "Green finance policy and digital transformation of heavily polluting firms: Evidence from China," Finance Research Letters, Elsevier, vol. 55(PA).
    2. Yang (Eric) Zhou & Jingjun (David) Xu & Zhiying Liu, 2024. "The impact of digital transformation on corporate innovation: Roles of analyst coverage and internal control," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 45(1), pages 373-393, January.
    3. Zhang, Yuting & Chin, Tachia & Al-Wazer, Ragwa, 2025. "Good neighbors but bad employers? How corporate digital transformation affects incongruence between external and internal corporate social responsibility," Technological Forecasting and Social Change, Elsevier, vol. 210(C).
    4. Pedersen, Torben & Scedrova, Anna & Grecu, Alina, 2022. "The effects of IT investments and skilled labor on firms’ value added," Technovation, Elsevier, vol. 116(C).
    5. Irene Bertschek & Joern Block & Alexander S. Kritikos & Caroline Stiel, 2024. "German financial state aid during Covid-19 pandemic: Higher impact among digitalized self-employed," Entrepreneurship & Regional Development, Taylor & Francis Journals, vol. 36(1-2), pages 76-97, January.
    6. Fang, Mingyue & Nie, Huihua & Shen, Xinyi, 2023. "Can enterprise digitization improve ESG performance?," Economic Modelling, Elsevier, vol. 118(C).
    7. Dominik M. Wielgos & Christian Homburg & Christina Kuehnl, 2021. "Digital business capability: its impact on firm and customer performance," Journal of the Academy of Marketing Science, Springer, vol. 49(4), pages 762-789, July.
    8. Laura Alfaro & Nick Bloom & Paola Conconi & Harald Fadinger & Patrick Legros & Andrew F Newman & Raffaella Sadun & John Van Reenen, 2024. "Come Together: Firm Boundaries and Delegation," Journal of the European Economic Association, European Economic Association, vol. 22(1), pages 34-72.
    9. Labro, Eva & Lang, Mark & Omartian, James D., 2023. "Predictive analytics and centralization of authority," Journal of Accounting and Economics, Elsevier, vol. 75(1).
    10. Nicholas Bloom & Luis Garicano & Raffaella Sadun & John Van Reenen, 2014. "The Distinct Effects of Information Technology and Communication Technology on Firm Organization," Management Science, INFORMS, vol. 60(12), pages 2859-2885, December.
    11. Luis Medrano-Adán & Vicente Salas-Fumás & J. Sanchez-Asin, 2015. "Heterogeneous entrepreneurs from occupational choices in economies with minimum wages," Small Business Economics, Springer, vol. 44(3), pages 597-619, March.
    12. Subramanian Rangan & Metin Sengul, 2009. "Information technology and transnational integration: Theory and evidence on the evolution of the modern multinational enterprise," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(9), pages 1496-1514, December.
    13. Mina Nasiri & Minna Saunila & Tero Rantala & Juhani Ukko, 2022. "Sustainable innovation among small businesses: The role of digital orientation, the external environment, and company characteristics," Sustainable Development, John Wiley & Sons, Ltd., vol. 30(4), pages 703-712, August.
    14. Malewska, Kamila & Cyfert, Szymon & Chwiłkowska-Kubala, Anna & Mierzejewska, Katrzyna & Szumowski, Witold, 2024. "The missing link between digital transformation and business model innovation in energy SMEs: The role of digital organisational culture," Energy Policy, Elsevier, vol. 192(C).
    15. Luigi Benfratello & Tiziano Razzolini & Alessandro Sembenelli, 2009. "Does ICT Investment Spur or Hamper Offshoring? Empirical Evidence from Microdata," Working papers 05, Former Department of Economics and Public Finance "G. Prato", University of Torino.
    16. Ponzoa, José M. & Gómez, Andrés & Mas, José M., 2023. "EU27 and USA institutions in the digital ecosystem: Proposal for a digital presence measurement index," Journal of Business Research, Elsevier, vol. 154(C).
    17. Antonio Farías & Christian A. Cancino, 2021. "Digital Transformation in the Chilean Lodging Sector: Opportunities for Sustainable Businesses," Sustainability, MDPI, vol. 13(14), pages 1-17, July.
    18. Omesh Kini & Mo Shen & Jaideep Shenoy & Venkat Subramaniam, 2022. "Labor Unions and Product Quality Failures," Management Science, INFORMS, vol. 68(7), pages 5403-5440, July.
    19. Venturini, Francesco, 2022. "Intelligent technologies and productivity spillovers: Evidence from the Fourth Industrial Revolution," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 220-243.
    20. Sauro Mocetti & Marcello Pagnini & Enrico Sette, 2017. "Information Technology and Banking Organization," Journal of Financial Services Research, Springer;Western Finance Association, vol. 51(3), pages 313-338, June.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:plo:pone00:0292972. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: plosone (email available below). General contact details of provider: https://journals.plos.org/plosone/ .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.