Digital transformation and enterprise mergers and acquisitions: Mechanism tests and empirical evidence

Abstract

Digital transformation acts as a driver for high-quality enterprise development. Focusing on Chinese A-share listed firms, this study uses machine learning methods to empirically investigate the impact of digital transformation on enterprise mergers and acquisitions (M&A). Results indicate that digital transformation can significantly promote enterprise M&A. This conclusion remains valid after overcoming endogeneity and executing various robustness checks. Notably, the influence of digital transformation on M&A varies significantly, with stronger effects observed in non-state-owned enterprises, those in competitive markets, and firms in a better financial environment. Mechanistic analysis reveals that enhanced financing and information channels are key pathways through which digital transformation facilitates M&A. This study offers empirical insights into the microeconomic impacts of digital transformation, emphasizing its role in enterprise M&A strategies.