Digital transformation, entrepreneurship, and disruptive innovation: evidence of corporate digitalization in China from 2010 to 2021

Abstract

The year 2010 was an important turning point for China’s economy, and the digital economy has become its new feature. In the digital economy wave, digital transformation and innovation are two essential starting points for enterprise development. Few studies have examined the effect of companies’ digital transformation on disruptive innovation, neglecting the role of entrepreneurship. This study aims to address this research gap by developing an analytical framework for digital transformation, entrepreneurship, and disruptive innovation. Based on China’s A-listed firms from 2010 to 2021, we use Python to create indicators for digital transformation and examine its impact on disruptive innovation and the role of entrepreneurship using a double fixed-effects model. The results demonstrate that digital transformation significantly promotes disruptive innovation, and entrepreneurship positively moderates this relationship. Furthermore, heterogeneity analyses show that digital transformation’s positive effects of disruptive innovation and entrepreneurship are more pronounced in non-SOEs, companies in growth and decline stages, and nonmanufacturing companies. However, in SOEs and manufacturing firms, entrepreneurship was unable to moderate this relationship. The conclusions reflect the exploration of the realization mechanism and micro-foundations of the current, in-depth digital transformations, and the findings provide reference guidelines for enabling enterprises to realize digital transformation and disruptive innovation and, relevant experiences.