Contribution of digital governments to digital transformation of firms: evidence from China

Abstract

ABSTRACT Rapid advances in information and communication technologies have promoted the evolution of digital governments and the digital transformation of firms (DTF). As a provider of public services and a regulator, the government is associated closely with the operations of firms. However, the manner by which a digital government contributes to the DTF remains unknown. In this study, we use a sample of Chinese A-share listed firms in 2021 to determine the configurations of digital government components that generate different levels of DTF via fuzzy set qualitative comparative analysis. Empirical results show that the synergy of multiple digital government components, instead of a single digital government component, generates high and non-high levels of DTF. Additionally, a digital government heterogeneously affects the digital transformation of state-owned and non-state-owned firms. Non-state-owned firms are more dependent on high-performing digital governments than state-owned firms in achieving high levels of DTF. These findings contribute to the understanding of the important role of digital governments and promote investigations into the driving mechanisms of the DTF.