Enterprise digital transformation, accounting information comparability and corporate innovation

Abstract

In the evolving digital landscape, the digital shift within corporations is pivotal for fostering innovation and elevating competitiveness. This study investigates the impact of digital transformation on enterprise innovation, utilizing a dataset of A-share listed firms from 2010 to 2020. To address sample self-selection, the Propensity Score Matching (PSM) method is employed, dividing enterprises into experimental and control groups based on their level of digital transformation. Additionally, to mitigate endogeneity concerns, all explanatory variables are lagged by one period. The study employs benchmark regression analysis, considering control variables and fixed effects for year and industry, to examine the relationship between digital transformation and innovation. The study constructs models to evaluate the mediating role of accounting information comparability in the relationship between digital transformation and innovation. Notably, a strong positive link is observed between a company’s digital evolution and its innovation capacities, suggesting that this evolution substantially augments innovation. Moreover, the consistency of accounting data further amplifies this effect. Such insights offer strategic guidance for companies aiming to bolster innovation amid their digital journey and underscore the necessity for consistent accounting data.