Digitalization policy and enterprise digital transformation: The role of big data capability

Abstract

How to support digital transformation to achieve a sustainable competitive advantage has become a topic of intense consideration among executives and policymakers. While previous research has established a connection between external policies and digital transformation, it has not fully assessed the impact of digitalization policies on enterprises. In this study, we categorize digitalization policies into three types: factor-based, environment-based, and industry-based. Using a hierarchical linear model, we find that all three types of policies have a significant positive effect on digital transformation. Furthermore, these policies enhance digital transformation by improving firms’ big data capabilities. This effect is more pronounced in regions with higher levels of network infrastructure, and non-state-owned enterprises exhibit greater sensitivity to these policies. These findings not only enrich the literature on the antecedents of digital transformation but also offer practical implications for government agencies and policymakers aiming to foster digital innovation.