Distinctive influence of entrepreneurs’ socioeconomic and political statuses on the digital transformation of SMEs in China

Abstract

ABSTRACT Digital transformation offers incredible opportunities for small- and medium-sized enterprises (SMEs). However, the lack of resources is a major constraint for SMEs’ digital transformation, which requires entrepreneurs to play a role in seizing opportunities. Building upon the status theory, this study explored how two types of entrepreneur status, namely, socioeconomic and political statuses, can differently affect SMEs’ digital transformation in China. The regression analysis of a national survey of 4566 Chinese SMEs suggests that entrepreneurs’ socioeconomic status has a positive effect, whereas their political status has a U-shaped effect on SMEs’ digital transformation. We also find that the effect of entrepreneurs’ socioeconomic status is more positive for new ventures, whereas the U-shaped effect of entrepreneurs’ political status is more profound for firms with stronger resource endowments. These findings in the context of emerging economies shed light on drivers of SMEs’ digital transformation from the multiple status perspective.