The power of financial support in accelerating digital transformation and corporate innovation in China : evidence from banking and capital markets

This study explores the role of fnancial support in the digital transformation of Chinese A-share-listed companies from 2001 to 2020. By utilizing the moderating efect model and threshold regression model, this study fnds the following results: (1) Digital transformation positively impacts innovation, and the support of banking and capital markets further strengthens this impact. (2) With the development of banking and capital markets, the impact of digital transformation on innovation changes from negative to positive, which is also refected in the subsamples of Eastern companies, small and medium-sized companies (SMEs), and non-SMEs. (3) The study reveals that only the capital market in the non-Eastern region has no threshold, and capital market support is efective only for non-SMEs when it reaches a higher level. These fndings have important implications for policymakers in promoting digital transformation through fnancial support and help companies understand how to use fnancial support to improve competitiveness.