Has digital transformation enhanced the corporate resilience in the face of COVID-19? Evidence from China

Abstract

Based on 3146 Chinese A-share listed firms, we reveal that digital transformation significantly enhances corporate resilience, including both traditional corporate resilience constructed using cross-sectional data and anticipated resilience built using panel data, in the face of the COVID-19 pandemic. This finding is consistent across both Ordinary Least Squares and generalized Difference-in-Differences analyses. Moreover, the enhancing effect of digital transformation on corporate resilience is more pronounced for firms located in regions with a low level of digital economy, labour- and capital-intensive firms, small firms, and private firms. Furthermore, we find that the enhancing effect of digital transformation on corporate resilience is achieved by improving firms' operational efficiency, increasing diversity in the firms' suppliers and customers, and enhancing firms' financing capabilities during the pandemic.