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How Digital Transformation Shapes Corporate R&D Expenditure: An Exploration of Multidimensional Perspectives and Innovation Consequences

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  • Tingqian Pu

Abstract

Digital transformation has accelerated corporate innovation and strengthened competitive advantage, yet its impact on one of the most critical innovation inputs—corporate R&D expenditure—remains underexplored. This study addresses this gap by employing machine learning-based text analysis on 27,163 observations of Chinese A-share listed firms from 2012 to 2021. By integrating the perspectives of agency theory and dynamic capabilities, I find a positive relationship between digital transformation and corporate R&D expenditure. Additionally, five key dimensions of digital transformation—artificial intelligence, blockchain, cloud computing, big data, and digital technology applications—are shown to significantly increase R&D expenditure. The study further provides evidence that digital transformation enhances the effectiveness of R&D expenditure in producing innovative outcomes. These findings not only advance the theoretical frameworks of agency theory and dynamic capabilities but also offer practical insights for firms seeking to optimize digital strategies to maximize innovation outcomes. While focused on Chinese firms, the results have broader implications for other emerging markets where digital transformation is evolving rapidly. JEL Classification: G34, O31, O32, O33.

Suggested Citation

  • Tingqian Pu, 2025. "How Digital Transformation Shapes Corporate R&D Expenditure: An Exploration of Multidimensional Perspectives and Innovation Consequences," SAGE Open, , vol. 15(3), pages 21582440251, July.
    • Handle: RePEc:sae:sagope:v:15:y:2025:i:3:p:21582440251349263
    DOI: 10.1177/21582440251349263
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    JEL classification:

    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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