The Impact of New Energy Enterprises’ Digital Transformation on Their Total Factor Productivity: Empirical Evidence from China

Abstract

As digital technologies disrupt one sector after another, an increasing number of new energy enterprises are positively embracing digital transformation. However, it remains unclear whether digital transformation drives enterprise total factor productivity. To fill this gap, using a dataset of Chinese A-share listed new energy enterprises from 2009 to 2021, we investigate theimpact of digital transformation on a firm’s total factor productivity. The results show that there is a promoting effect of digital transformation on new energy enterprises’ total factor productivity. The promoting effect is significant only in the state-owned firms and the eastern region. Further, we demonstrate that when a firm has digital transformation, it has a higher operating efficiency, lower cost, and greater innovation power leading to higher total factor productivity. This research elucidates the role of digital transformation in fostering the new energy industry’s growth and provides meaningful suggestions for improving the effectiveness of digital transformation in new energy enterprises.