The Emerging Driving Force of Productivity : Does Digital Transformation Work?

The deep integration of manufacturing and digital technology has become an important means to promote the high-quality development of manufacturing. Based on the data of China's listed manufacturing companies from 2007 to 2020, this study uses a panel fixed-effect model to empirically test the effect of digital transformation on the total factor productivity of enterprises. It found that digital transformation has significantly improved the total factor productivity of China's listed manufacturing companies. This conclusion still holds true when considering the endogeneity problem and carrying out a series of robustness tests. The results of the heterogeneity analysis showed that the promotion effect of digital transformation on total factor productivity exists only in samples receiving low government subsidies, samples with low industry concentration and samples of large-scale enterprises. In addition, this study also found that technological innovation, human capital and inventory management efficiency are important mechanisms for digital transformation to improve the total factor productivity of enterprises