Demystifying the Impact of Corporate Digital Transformation on Innovation : The Differential Roles of Digital Infrastructure and Technology

Digital technology and digital infrastructure are two differential fundamental components in corporate digital transformation. This article demystifies the impact of digital technology and digital infrastructure on corporate innovation outputs. Based on data from Chinese A-share listed companies from 2010 to 2021, using textual-based measures and panel fixed effects models, the study finds the following results: first, both digital technology and digital infrastructure can significantly improve corporate innovation, but digital infrastructure has a more significant impact. Second, compared to digital technology, digital infrastructure plays a more important role in the impact mechanism of digital transformation on corporate innovation. Third, cross-sectional analysis shows that the role of digital infrastructure is more significant in non-state-owned, large-scale, and high-growth companies, while the role of digital technology is more prominent in non-state-owned, small-scale, and high-growth companies. The results of this paper improve our understanding of the relationship between digital transformation and corporate innovation, and provide insights into the differential roles played by different components of digital transformation