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Has digital transformation enhanced the corporate resilience in the face of COVID-19? Evidence from China

Author

Listed:
  • Chen, Yihui
  • Cai, Qingfeng
  • Wang, Zhenkai
  • Xu, Zhenfeng

Abstract

Based on 3146 Chinese A-share listed firms, we reveal that digital transformation significantly enhances corporate resilience, including both traditional corporate resilience constructed using cross-sectional data and anticipated resilience built using panel data, in the face of the COVID-19 pandemic. This finding is consistent across both Ordinary Least Squares and generalized Difference-in-Differences analyses. Moreover, the enhancing effect of digital transformation on corporate resilience is more pronounced for firms located in regions with a low level of digital economy, labour- and capital-intensive firms, small firms, and private firms. Furthermore, we find that the enhancing effect of digital transformation on corporate resilience is achieved by improving firms' operational efficiency, increasing diversity in the firms' suppliers and customers, and enhancing firms' financing capabilities during the pandemic.

Suggested Citation

  • Chen, Yihui & Cai, Qingfeng & Wang, Zhenkai & Xu, Zhenfeng, 2024. "Has digital transformation enhanced the corporate resilience in the face of COVID-19? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 96(PB).
    • Handle: RePEc:eee:finana:v:96:y:2024:i:pb:s1057521924006410
    DOI: 10.1016/j.irfa.2024.103709
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    More about this item

    Keywords

    Corporate resilience; Digital transformation; The COVID-19 pandemic; Operational efficiency; Financing capabilities;
    All these keywords.

    JEL classification:

    • G3 - Financial Economics - - Corporate Finance and Governance
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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