Does Digital Transformation Affect Outward Foreign Direct Investment Performance? Evidence from China

Digital transformation has become a crucial strategic decision for enterprises to strengthen international competitiveness and achieve sustainable development. This study aims to investigate the impact of digital transformation on outward foreign direct investment (OFDI) performance and the conditions that influence this relationship using the ordinary least-squares regression estimation method and the data of Chinese A-share listed enterprises. The results show that digital transformation improves OFDI performance. The mechanism analysis verifies that digital transformation enhances OFDI performance by promoting corporate reputation and innovation. The moderating analysis demonstrates that the host country’s digital infrastructure negatively moderates the positive relationship between digital transformation and OFDI performance, while diplomatic relations between home and host countries play a positive moderating role. The heterogeneity analysis reveals that state-owned, labor-intensive, and technology-intensive enterprises and enterprises investing in non-Belt-and-Road countries benefit more from digital transformation to promote OFDI performance. This study extends the OFDI theory of emerging market enterprises in the context of digital transformation and provide practical implications for improving the OFDI performance of multinational enterprises.