IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v93y2024ipap1114-1124.html
   My bibliography  Save this article

How does business environment affect firm digital transformation: A fsQCA study based on Chinese manufacturing firms

Author

Listed:
  • Chen, Xuanyu
  • Yang, Na

Abstract

Digital transformation can improve firms' competitive advantages and contribute to regional economic development. The question of how to enhance the business environment to facilitate and encourage firm digital transformation emerges as a crucial area of inquiry. To explore the relationship between city-level business environment and firm digital transformation, we conducted configuration analysis based on a sample of 3088 manufacturing firms across 240 Chinese cities in year 2022. Based on results, we identified three distinct business environments, consisting of both detrimental and favorable factors, that can promote firm digital transformation. Thereinto, limited public resources, a shortage of human resources, and an underdeveloped market environment work that prompt firms' motivation of digital transformation, since the negative consequences stemming from those limitations can be mitigated by digital transformation. Meanwhile, a conducive innovation environment, significant financial development, a favorable legal environment, and a supportive political environment serve as advantageous factors that amplify firms' willingness to embrace digital transformation, since they mitigate costs and risks associated with digital transformation. Our study expands the theoretical boundaries of digital transformation, and provides valuable insights for government to optimize business environments to support firms’ digital transformation.

Suggested Citation

  • Chen, Xuanyu & Yang, Na, 2024. "How does business environment affect firm digital transformation: A fsQCA study based on Chinese manufacturing firms," International Review of Economics & Finance, Elsevier, vol. 93(PA), pages 1114-1124.
    • Handle: RePEc:eee:reveco:v:93:y:2024:i:pa:p:1114-1124
    DOI: 10.1016/j.iref.2024.03.071
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056024002363
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2024.03.071?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
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    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:eee:reveco:v:93:y:2024:i:pa:p:1114-1124. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    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.