Abstract
This paper examines the effect of Intellectual Property Protection (IPP) on firm digital transformation (DT) using a three-dimensional panel dataset of Chinese-listed companies and cities from 2012 to 2020. Our findings reveal a significant and robust positive relationship between IPP and firm DT, even after addressing endogeneity concerns. Mechanism analysis demonstrates that IPP promotes firm DT by alleviating financing constraints and incentivizing research and development (R&D) investments. The results highlight the role of IPP in fostering an environment conducive to digital transformation and provide valuable insights for policymakers and firms aiming to enhance their digital capabilities.
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