The Effect of Corporate Digitalization on Investment Efficiency: Analysis of Theory and Model Design

Abstract

This study examines a large amount of literature to sort out the relevant studies on enterprise investment efficiency, enterprise digitization and the effect of industry digitization on enterprise investment efficiency. The paper provides a theory analysis of the effect of enterprise digitization on investment efficiency as a whole. Theoretical level proves that enterprise digitalization can significantly improve the overall enterprise investment efficiency. While investment efficiency is classified into overinvestment and underinvestment, enterprise digitization has different effects on them. Although enterprise digitization can significantly inhibit over-investment and alleviate under-investment of enterprises, it exerts a stronger inhibitory effect on over-investment. Subsequently, the mechanism of enterprise digitization's impact on investment efficiency is further analyzed theoretically, and the research hypothesis is proposed. Then the sample selection, index selection and model building are introduced. Finally, the next step is proposed, and empirical analysis is carried out based on the model proposed in the research design in the hope of proving the impact of enterprise digitalization on the efficiency of investment.