Digital Transformation and Manufacturing Firm Performance: Evidence from China
Abstract
:1. Introduction
2. Theoretical and Hypothesis
2.1. Digital Transformation and Manufacturing Enterprise Performance
2.2. Digital Transformation, Heterogeneity, and Manufacturing Firm Performance
2.3. Digital Transformation, Channel Mechanism, and Manufacturing Enterprise Performance
3. Materials and Methods
3.1. Sample and Data Collection
3.2. Variable Definition
3.2.1. Dependent Variables
3.2.2. Independent Variable
3.2.3. Control Variables
3.3. Model Setting
4. Results
4.1. Descriptive Statistical Analysis
4.2. Analysis of Multiple Regression Results
4.3. Treatment of Endogeneity Issues
4.3.1. Adopting Dynamic Panel Data Econometric Model
4.3.2. Adopting Instrumental Variables Approach
4.4. Robustness Tests
5. Further Analysis
5.1. Heterogeneity Analysis
5.2. Mechanism Test
6. Conclusions
Author Contributions
Funding
Institutional Review Board Statement
Informed Consent Statement
Data Availability Statement
Conflicts of Interest
References
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Variable Type | Variables | Variable Symbols | Variable Definition |
---|---|---|---|
Dependent Variables | Corporate Performance | ROA | The ratio of the company’s net income to total assets |
Independent Variable | Digital Transformation | DT | The ratio of digital intangible assets to total intangible assets |
Control Variables | Company Size | Asset | Total company assets are taken as the logarithm |
Nature of ownership | Soe | State-owned enterprises take 1 and non-state-owned enterprises take 0 | |
Financial leverage | LEV | The ratio of the company’s year-end liabilities to total assets | |
Enterprise Value | TobinQ | The ratio of market capitalization to total assets | |
Market capitalization book-to-bill ratio | MB | The ratio of company market capitalization to total assets | |
Inventory turnover rate | Turnover | The ratio of the company’s operating costs to the ending balance of inventories | |
Earnings Volatility | Volatility | Three-year volatility of the ratio of EBIT to total assets | |
Controlling shareholder’s shareholding | Sharehold | The shareholding ratio of the company’s controlling shareholders | |
Shareholding Checks and Balances | Balance | The ratio of the shareholding of the 2nd–5th largest shareholder to the shareholding of the first largest shareholder | |
Two jobs in one | Dual | Take 1 if the chairman and general manager are the same people, otherwise, take 0 | |
Board Size | Board | Number of board directors plus one to take the logarithm | |
Per capita profit generation | Perprofit | The ratio of net profit to the number of employees | |
Employee Intensity | Intensity | The ratio of the number of employees at the end of the year to the operating revenue for the year | |
Free cash flow | Freecash | EBITDA + depreciation and amortization-working capital additions-capital expenditures | |
Net cash flow from operations | Cashflow | Net cash flows from operating activities | |
Overhead rate | Mfree | The ratio of administrative expenses to operating income |
Variables | Obs | Mean | Std. Dev. | Min | p25 | p50 | p75 | Max |
---|---|---|---|---|---|---|---|---|
ROA | 5569 | 0.0426 | 0.104 | −0.556 | 0.0261 | 0.0532 | 0.0845 | 0.247 |
DT | 5569 | 0.180 | 0.252 | 0 | 0.00734 | 0.0637 | 0.239 | 1.000 |
Asset | 5569 | 21.66 | 1.115 | 19.49 | 20.85 | 21.52 | 22.31 | 25.01 |
Soe | 5569 | 0.246 | 0.431 | −0.333 | 0 | 0 | 0.221 | 1.492 |
Cashflow | 5569 | 2.800 × 108 | 7.770 × 108 | −7.090 × 108 | 6.964 × 106 | 7.750 × 107 | 2.370 × 108 | 5.430 × 109 |
LEV | 5569 | 0.362 | 0.214 | 0.0397 | 0.196 | 0.332 | 0.492 | 1.236 |
MB | 5569 | 0.318 | 0.159 | −0.0471 | 0.202 | 0.298 | 0.418 | 0.744 |
Mfree | 5569 | 0.133 | 0.115 | 0.0158 | 0.0630 | 0.102 | 0.161 | 0.737 |
Turnover | 5569 | 110.4 | 613.9 | −171.3 | 2.274 | 3.842 | 6.894 | 5065 |
Volatility | 5569 | 0.0511 | 0.0764 | 0.00127 | 0.0113 | 0.0239 | 0.0577 | 0.495 |
Sharehold | 5569 | 33.63 | 14.33 | 7.500 | 22.46 | 31.45 | 43.28 | 70.77 |
Balance | 5569 | 0.842 | 0.652 | 0.0367 | 0.330 | 0.675 | 1.188 | 2.983 |
Dual | 5569 | 0.378 | 0.483 | −0.0563 | 0 | 0 | 1 | 1 |
Board | 5569 | 2.088 | 0.213 | 1.386 | 1.946 | 2.197 | 2.197 | 2.833 |
Perprofit | 5569 | 36,750 | 378,378 | −2.53 × 106 | 19,031 | 55,785 | 118,075 | 1.018 × 106 |
Intensity | 5569 | 1.855 | 1.389 | 0.113 | 0.888 | 1.509 | 2.447 | 8.157 |
Freecash | 5569 | −3.980 × 107 | 1.370 × 109 | −5.950 × 109 | −3.000 × 108 | 5.360 × 107 | 2.540 × 108 | 6.240 × 109 |
TobinQ | 5569 | 2.495 | 1.587 | 0.837 | 1.514 | 2.007 | 2.892 | 10.17 |
Variables | (1) | (2) | (3) | (4) | (5) |
---|---|---|---|---|---|
ROA | ROA | ROA | ROA | ROA | |
DT | 4.7076 *** | 5.9388 *** | 10.9207 *** | 10.8432 *** | 11.8057 *** |
(3.184) | (3.901) | (4.477) | (4.465) | (5.261) | |
Asset | −0.0146 *** | 0.0329 *** | 0.0449 *** | 0.0203 *** | |
(−3.730) | (5.436) | (7.073) | (3.408) | ||
Soe | −0.0235 | 0.0077 | 0.0024 | −0.0049 | |
(−1.511) | (0.361) | (0.110) | (−0.249) | ||
Cashflow | 0.0000 | 0.0000 | 0.0000 | 0.0000 | |
(0.792) | (0.748) | (0.559) | (0.521) | ||
LEV | −0.5119 *** | −0.5096 *** | −0.3751 *** | ||
(−33.734) | (−33.757) | (−24.949) | |||
MB | 0.0969 *** | 0.0706 ** | −0.0174 | ||
(3.263) | (2.337) | (−0.576) | |||
Mfree | −0.0510 ** | −0.0431 * | −0.0457 ** | ||
(−2.197) | (−1.860) | (−2.121) | |||
Turnover | −0.0000 | −0.0000 | −0.0000 | ||
(−0.419) | (−0.408) | (−0.893) | |||
Volatility | 1.8486 *** | 1.8483 *** | 1.8159 *** | ||
(496.958) | (499.923) | (497.814) | |||
Sharehold | 0.0031 *** | 0.0021 *** | |||
(5.935) | (4.445) | ||||
Balance | −0.0185 | −0.0083 | |||
(−1.631) | (−0.794) | ||||
Dual | 0.0058 | 0.0050 | |||
(0.486) | (0.459) | ||||
Board | 0.0102 *** | 0.0087 ** | |||
(2.621) | (2.450) | ||||
Perprofit | 0.0000 *** | ||||
(29.175) | |||||
Intensity | −0.0046 *** | ||||
(−2.992) | |||||
Freecash | 0.0000 *** | ||||
(2.907) | |||||
TobinQ | −0.0151 *** | ||||
(−9.163) | |||||
Constant | 1.0290 | 1.3451 | −0.6259 *** | −1.0510 *** | −0.4553 *** |
(1.038) | (1.390) | (−4.788) | (−7.090) | (−3.236) | |
Controls | NO | YES | YES | YES | YES |
YEAR/IND | YES | YES | YES | YES | YES |
Observations | 5569 | 5569 | 5569 | 5569 | 5569 |
Number of companies | 911 | 911 | 911 | 911 | 911 |
R-squared | 0.409 | 0.412 | 0.559 | 0.583 | 0.579 |
Variables | DIF-GMM | SYS-GMM | IV-2SLS | |||
---|---|---|---|---|---|---|
(1) | (2) | (3) | (4) | (5) | (6) | |
ROA | ROA | ROA | ROA | ROA | ROA | |
DT | 4.6261 *** | 4.4969 *** | 4.2664 *** | 4.5858 *** | 2.4850 ** | 2.4037 *** |
(15.104) | (2.650) | (10.064) | (5.684) | (2.143) | (2.978) | |
Asset | −0.0371 *** | −0.0356 *** | −0.2223 *** | −0.2248 | −0.0275 *** | −0.0291 *** |
(−23.986) | (−3.668) | (−16.431) | (−1.324) | (−7.723) | (−3.753) | |
Cashflow | 0.0000 | 0.0000 | 0.0000 *** | 0.0000 | 0.0000 | 0.0000 |
(0.454) | (0.414) | (9.253) | (1.137) | (0.425) | (0.296) | |
LEV | 0.0970 *** | 0.0856 | 0.7017 *** | 0.7833 | 0.0701 *** | 0.0631 |
(9.806) | (0.808) | (10.111) | (0.837) | (7.933) | (0.898) | |
MB | 0.1898 *** | 0.1625 *** | −0.6223 *** | −0.5513 | 0.1018 *** | 0.0801 * |
(27.698) | (2.833) | (−10.392) | (−0.758) | (5.741) | (1.915) | |
Mfree | −0.1529 *** | −0.1488 *** | −1.1034 *** | −1.1293 | −0.1048 *** | −0.1016 *** |
(−20.438) | (−3.494) | (−15.214) | (−1.266) | (−8.107) | (−3.287) | |
Turnover | −0.0000 | −0.0000 | −0.0000 | 0.0000 | 0.0000 | 0.0000 |
(−0.774) | (−0.935) | (−0.034) | (0.052) | (0.450) | (1.021) | |
Volatility | −1.1074 *** | −1.0888 *** | −0.1357 ** | −0.1579 | −0.9202 *** | −0.9519 *** |
(−57.749) | (−3.469) | (−2.147) | (−0.244) | (−44.747) | (−3.437) | |
Perprofit | 0.0000 *** | 0.0000 *** | 0.0000 *** | 0.0000 ** | 0.0000 *** | 0.0000 *** |
(23.204) | (2.684) | (20.624) | (2.543) | (30.901) | (3.600) | |
Intensity | −0.0033 *** | −0.0029 | −0.0398 *** | −0.0387 *** | −0.0014 * | −0.0015 |
(−9.491) | (−1.514) | (−13.587) | (−3.329) | (−1.727) | (−1.099) | |
Freecash | 0.0000 | 0.0000 | −0.0000 *** | −0.0000 | 0.0000 | 0.0000 ** |
(1.111) | (0.955) | (−7.370) | (−0.784) | (0.884) | (1.981) | |
TobinQ | 0.0078 *** | 0.0068 ** | −0.0140 *** | −0.0144 | 0.0057 *** | 0.0059 ** |
(13.302) | (2.442) | (−10.877) | (−0.602) | (4.037) | (2.464) | |
Soe | −0.0012 | 0.0812 | 0.0156 | 0.0098 | ||
(−0.057) | (0.615) | (1.335) | (0.702) | |||
Sharehold | 0.0003 | 0.0005 | 0.0002 | 0.0004 | ||
(0.695) | (0.198) | (0.788) | (0.753) | |||
Balance | 0.0172 * | −0.0605 | 0.0190 *** | 0.0167 ** | ||
(1.760) | (−0.932) | (3.240) | (2.295) | |||
Dual | 0.0198 ** | 0.0251 | 0.0217 *** | 0.0181 ** | ||
(2.340) | (0.429) | (3.710) | (2.398) | |||
lnBoard | 0.0099 | −0.1806 | 0.0013 | 0.0053 | ||
(0.385) | (−1.068) | (0.083) | (0.280) | |||
L.ROA | 0.0216 *** | 0.0281 *** | 0.2027 *** | 0.1962 *** | ||
(3.174) | (3.235) | (3.872) | (3.384) | |||
Observations | 3657 | 3655 | 3657 | 3655 | 4374 | 4374 |
Number of companies | 643 | 643 | 643 | 643 | 655 | 655 |
R-squared | 0.589 | 0.588 | ||||
Centered-R2 | 0.1663 | 0.1705 | ||||
AR(1)—p-value | 0.000 | 0.000 | 0.000 | 0.000 | ||
AR(2)—p-value | 0.573 | 0.592 | 0.586 | 0.475 | ||
Hansen—p-value | 0.115 | 0.174 | 0.192 | 0.159 | ||
Anderson canon. corr. LM | 0.000 | 0.000 | ||||
Statistical p-value | ||||||
Cragg−Donald Wald F | 313.77 | 313.77 | ||||
Statistical quantities | <16.38> | <16.38> |
Variables | (1) | (2) | (3) | (4) |
---|---|---|---|---|
ROE | ROE | ROA | ROA | |
DT | 0.0174 *** | 4.8586 *** | ||
(3.150) | (5.679) | |||
DT1 | 0.7107 *** | 1.7770 *** | ||
(2.740) | (5.573) | |||
Asset | −0.0788 * | −0.0276 *** | ||
(−1.714) | (−4.091) | |||
Soe | −0.2364 * | 0.0140 | ||
(−1.927) | (1.073) | |||
Cashflow | 0.0000 | 0.0000 | ||
(0.633) | (0.668) | |||
LEV | 0.4441 *** | 0.0268 | ||
(3.500) | (0.412) | |||
MB | 0.6258 ** | 0.1170 ** | ||
(2.027) | (2.309) | |||
Mfree | −0.8078 *** | −0.0752 *** | ||
(−3.753) | (−3.291) | |||
Turnover | −0.0000 | −0.0000 | ||
(−0.385) | (−0.291) | |||
Volatility | −0.1006 *** | −0.7835 *** | ||
(−3.307) | (−3.282) | |||
Sharehold | 0.0041 | 0.0008 ** | ||
(1.199) | (2.217) | |||
Balance | −0.0499 | 0.0240 *** | ||
(−0.656) | (3.050) | |||
Dual | 0.0435 | 0.0169 *** | ||
(0.459) | (2.820) | |||
Board | 0.0110 | 0.0016 | ||
(0.404) | (0.857) | |||
Perprofit | 0.0000 *** | 0.0000 *** | ||
(4.729) | (3.823) | |||
Intensity | −0.0011 | −0.0030 * | ||
(−0.076) | (−1.910) | |||
Freecash | −0.0000 | 0.0000 | ||
(−0.376) | (1.035) | |||
TobinQ | 0.0284 | 0.0100 ** | ||
(1.642) | (2.411) | |||
Constant | −0.0122 | 1.2075 *** | 0.1946 *** | 0.7847 *** |
(−0.214) | (3.157) | (7.146) | (5.046) | |
Controls | NO | YES | NO | YES |
YEAR/IND | YES | YES | YES | YES |
Observations | 5569 | 5569 | 5569 | 5569 |
Number of companies | 911 | 911 | 911 | 911 |
R-squared | 0.583 | 0.607 | 0.652 | 0.545 |
Variables | (1) | (2) | (3) | (4) |
---|---|---|---|---|
State-Owned-Enterprises | Non-State-Owned Enterprises | High Marketability | Low Market Degree | |
DT | 4.4143 *** | 0.1256 | 9.7151 *** | −0.9435 |
(4.994) | (0.953) | (3.975) | (−0.960) | |
Asset | −0.0003 | 0.0223 *** | −0.0153 *** | 0.0140 ** |
(−0.142) | (2.742) | (−5.673) | (2.190) | |
Soe | 0.0293 * | −0.0085 | ||
(1.844) | (−0.430) | |||
Cashflow | −0.0000 | 0.0000 *** | 0.0000 | 0.0000 |
(−0.390) | (3.069) | (1.303) | (0.937) | |
LEV | −0.1264 *** | −0.4832 *** | 0.0801 *** | 0.0922 *** |
(−9.142) | (−26.107) | (6.733) | (5.300) | |
MB | −0.0189 | −0.0329 | 0.1381 *** | 0.0779 ** |
(−1.198) | (−0.871) | (6.612) | (2.560) | |
Mfree | −0.1547 *** | 0.0094 | −0.0700 *** | −0.0638 *** |
(−8.516) | (0.382) | (−3.253) | (−3.469) | |
Turnover | 0.0000 | −0.0000 | 0.0000 *** | −0.0000 |
(0.759) | (−0.709) | (3.355) | (−0.943) | |
Volatility | −0.1794 *** | 1.8415 *** | −1.0866 *** | 1.7056 *** |
(−6.781) | (412.486) | (−42.428) | (405.767) | |
Sharehold | 0.0004 * | 0.0028 *** | 0.0011 *** | 0.0021 *** |
(1.670) | (4.437) | (6.664) | (3.682) | |
Balance | 0.0025 | −0.0113 | 0.0151 *** | −0.0035 |
(0.424) | (−0.765) | (4.594) | (−0.282) | |
Dual | 0.0068 | −0.0039 | 0.0072 | 0.0150 |
(1.172) | (−0.284) | (1.639) | (1.227) | |
Board | 0.0019 | 0.0136 *** | −0.0003 | 0.0066 * |
(1.310) | (2.755) | (−0.222) | (1.776) | |
Perprofit | 0.0000 *** | 0.0000 *** | 0.0000 *** | 0.0000 *** |
(13.761) | (23.793) | (24.617) | (31.099) | |
Intensity | −0.0008 | −0.0086 *** | −0.0010 | 0.0003 |
(−1.584) | (−3.780) | (−0.597) | (0.270) | |
Freecash | 0.0000 | 0.0000 *** | −0.0000 | 0.0000 * |
(0.747) | (5.769) | (−1.421) | (1.926) | |
TobinQ | 0.0008 | −0.0183 *** | 0.0181 *** | −0.0117 *** |
(0.658) | (−9.695) | (9.393) | (−8.664) | |
Constant | 0.0867 | −0.5138 *** | 0.2733 *** | −0.5539 *** |
(1.590) | (−2.657) | (4.516) | (−3.675) | |
Controls | YES | YES | YES | YES |
YEAR/IND | YES | YES | YES | YES |
Observations | 1308 | 4034 | 3226 | 2308 |
Number of companies | 195 | 747 | 593 | 507 |
R-squared | 0.602 | 0.587 | 0.596 | 0.573 |
Variables | (1) | (2) | (3) | (4) |
---|---|---|---|---|
CPM | ROA | R&D | ROA | |
DT | −10.6742 *** | 0.3021 *** | 7.9536 *** | 0.3921 *** |
(−5.158) | (3.153) | (3.609) | (6.108) | |
CPM | −1.0777 *** | |||
(−5.882) | ||||
R&D | 1.4351 *** | |||
(7.946) | ||||
Asset | 0.0181 *** | 0.0005 | 0.0180 *** | 0.0005 |
(3.324) | (1.347) | (3.302) | (1.302) | |
Soe | −0.0018 | −0.0014 | −0.0009 | −0.0013 |
(−0.101) | (−1.317) | (−0.053) | (−1.233) | |
Cashflow | 0.0000 | 0.0000 * | 0.0000 | 0.0000 * |
(0.312) | (1.902) | (0.340) | (1.924) | |
LEV | −0.3668 *** | 0.0264 *** | −0.3669 *** | 0.0263 *** |
(−26.658) | (27.342) | (−26.654) | (27.366) | |
MB | 0.0156 | −0.0340 *** | 0.0156 | −0.0341 *** |
(0.561) | (−17.280) | (0.558) | (−17.354) | |
Mfree | −0.0376 * | −0.0038 *** | −0.0376 * | −0.0039 *** |
(−1.890) | (−2.708) | (−1.887) | (−2.780) | |
Turnover | −0.0000 | −0.0000 | −0.0000 | −0.0000 |
(−0.939) | (−0.263) | (−0.937) | (−0.277) | |
Volatility | 1.5401 *** | 0.1548 *** | 1.5402 *** | 0.1549 *** |
(462.677) | (104.804) | (462.435) | (105.088) | |
Sharehold | 0.0019 *** | 0.0000 * | 0.0018 *** | 0.0000 * |
(4.339) | (1.790) | (4.315) | (1.720) | |
Balance | −0.0066 | −0.0013 ** | −0.0066 | −0.0013 ** |
(−0.697) | (−2.160) | (−0.697) | (−2.156) | |
Dual | 0.0041 | −0.0002 | 0.0039 | −0.0003 |
(0.410) | (−0.366) | (0.392) | (−0.466) | |
Board | 0.0079 ** | 0.0002 | 0.0584 ** | 0.0004 |
(2.439) | (0.858) | (2.204) | (0.212) | |
Perprofit | 0.0000 *** | −0.0000 *** | 0.0000 *** | −0.0000 *** |
(29.830) | (−5.268) | (29.824) | (−5.261) | |
Intensity | −0.0042 *** | 0.0004 *** | −0.0041 *** | 0.0004 *** |
(−2.960) | (3.949) | (−2.950) | (4.067) | |
Freecash | 0.0000 *** | −0.0000 * | 0.0000 *** | −0.0000 * |
(2.974) | (−1.735) | (2.981) | (−1.729) | |
TobinQ | −0.0116 *** | −0.0024 *** | −0.0117 *** | −0.0024 *** |
(−7.617) | (−22.401) | (−7.635) | (−22.444) | |
Constant | −0.4135 *** | −0.0038 | −0.4675 *** | −0.0025 |
(−3.228) | (−0.457) | (−3.423) | (−0.284) | |
Controls | YES | YES | YES | YES |
YEAR/IND | YES | YES | YES | YES |
Observations | 5569 | 5569 | 5569 | 5569 |
Number of companies | 911 | 911 | 911 | 911 |
R-squared | 0.602 | 0.715 | 0.596 | 0.651 |
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Wang, H.; Cao, W.; Wang, F. Digital Transformation and Manufacturing Firm Performance: Evidence from China. Sustainability 2022, 14, 10212. https://doi.org/10.3390/su141610212
Wang H, Cao W, Wang F. Digital Transformation and Manufacturing Firm Performance: Evidence from China. Sustainability. 2022; 14(16):10212. https://doi.org/10.3390/su141610212
Chicago/Turabian StyleWang, Hongtao, Wencheng Cao, and Fei Wang. 2022. "Digital Transformation and Manufacturing Firm Performance: Evidence from China" Sustainability 14, no. 16: 10212. https://doi.org/10.3390/su141610212