The Impact of an Organization's Digital Transformation on the Long-Term M&A Performance

Abstract

Based on the data of China's A-share listed companies from 2012 to 2022, this paper uses a benchmark regression model to explore the impact and mechanism of corporate digitization on long-term M&A performance. It is found that the higher the degree of corporate digitization, the worse the long-term M&A performance. This finding reverses the traditional view that digitization can effectively improve the operational efficiency of enterprises and the quality of M&A decisions. This finding still holds after changing the enterprise digital transformation measure, replacing control variables, and lagging long-term M&A performance by one period. This paper provides new perspectives on the risk points that companies may overlook in pursuing digital transformation, aiming to help companies use information to make rational decisions and use digitalization to predict future developments accurately. This study emphasizes the need for managers to balance long-term and short-term interests and identify and prevent short-sightedness issues, providing insights for managers to balance immediate benefits and sustainable development in a complex and changing business environment, which is essential for enterprises to deploy strategic plans in the current fast-changing economic environment.