Digital Transformation, Firm Boundaries, and Market Power: Evidence from China’s Listed Companies
Abstract
:1. Introduction
2. Theoretical Analysis and Hypothesis
2.1. Digital Transformation Enables External Expansion and Increases Market Power by Promoting Corporate M&A
2.2. Digital Transformation Enables Internal Growth and Increases Market Power by Facilitating the Establishment of Subsidiaries
3. Research Methodology
3.1. Variables
3.1.1. Explanatory Variable
3.1.2. Explained Variable
3.1.3. Control Variables
3.2. Model
3.3. Data Sources
4. Results
4.1. Descriptive Statistics
4.2. Regression Results and Analysis
4.3. Intrinsic Mechanisms of Digital Transformation Affecting Market Power: Firm Boundaries
4.3.1. Digital Transformation Promotes M&A for External Expansion
4.3.2. Digital Transformation Promotes the Establishment of Subsidiaries for Internal Growth
5. Discussion and Conclusions
5.1. Discussion
5.2. Conclusions
Author Contributions
Funding
Data Availability Statement
Conflicts of Interest
References
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Types | Abbreviation | Definition |
---|---|---|
Explanatory Variable | Digital | Standardized digital transformation thesaurus word frequency |
Explained Variable | Power | Price mark-up |
Control Variables | Size | ln(1 + total assets) |
Roa | Net profit/total assets | |
Top | Shareholding ratio of the largest shareholder | |
Lev | Total liabilities/total assets | |
Fix | Fixed assets/total assets |
Variable | N | Mean | SD | Min | Max |
---|---|---|---|---|---|
Power | 24,361 | 1.270 | 0.207 | 0.211 | 2.981 |
Digital | 24,361 | 3.224 | 1.246 | 0 | 7.368 |
Size | 24,361 | 22.17 | 1.328 | 15.38 | 28.64 |
Roa | 24,361 | 0.0370 | 0.124 | −3.164 | 10.40 |
Top | 24,361 | 34.92 | 14.95 | 2.197 | 89.99 |
Lev | 24,361 | 0.447 | 0.210 | 0.00700 | 1 |
Fix | 24,361 | 0.227 | 0.157 | 0 | 0.929 |
(3) | (4) | |
---|---|---|
IV1 | IV2 | |
Digital | 0.006 ** | 0.074 ** |
(0.003) | (0.030) | |
Size | −0.019 *** | −0.032 *** |
(0.002) | (0.006) | |
Roa | −0.056 *** | −0.070 *** |
(0.010) | (0.013) | |
Top | 0.000 *** | 0.000 |
(0.000) | (0.000) | |
Lev | −0.079 *** | −0.081 *** |
(0.007) | (0.013) | |
Fix | 0.368 *** | 0.346 *** |
(0.010) | (0.014) | |
_cons | ||
N | 21,147 | 19,931 |
R2 | 0.305 | 0.133 |
(1) | (2) | (3) | (4) | |
---|---|---|---|---|
MA | Power | Subsidiary | Power | |
Digital | 0.047 *** | 0.050 *** | 0.041 *** | 0.028 *** |
(0.016) | (0.001) | (0.006) | (0.001) | |
MA | 0.004 *** | |||
(0.001) | ||||
Subsidiary | 0.019 *** | |||
(0.001) | ||||
Size | 0.298 *** | −0.025 *** | 0.374 *** | 0.017 *** |
(0.027) | (0.001) | (0.010) | (0.002) | |
Roa | 0.476 ** | −0.284 *** | −0.277 *** | −0.267 *** |
(0.238) | (0.022) | (0.094) | (0.016) | |
Top | −0.017 *** | −0.000 *** | 0.004 *** | −0.001 *** |
(0.002) | (0.000) | (0.001) | (0.000) | |
Lev | 0.150 | −0.267 *** | 0.268 *** | −0.145 *** |
(0.110) | (0.007) | (0.043) | (0.007) | |
Fix | 0.032 | 0.334 *** | 0.116 ** | 0.337 *** |
(0.141) | (0.009) | (0.057) | (0.010) | |
_cons | −5.226 *** | 1.726 *** | −6.582 *** | 0.792 *** |
(0.576) | (0.022) | (0.224) | (0.036) | |
N | 23,550 | 23,719 | 24,195 | 24,195 |
R2 | 0.325 | 0.295 | 0.818 | 0.781 |
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Xu, Y.; Li, C. Digital Transformation, Firm Boundaries, and Market Power: Evidence from China’s Listed Companies. Systems 2023, 11, 479. https://doi.org/10.3390/systems11090479
Xu Y, Li C. Digital Transformation, Firm Boundaries, and Market Power: Evidence from China’s Listed Companies. Systems. 2023; 11(9):479. https://doi.org/10.3390/systems11090479
Chicago/Turabian StyleXu, Yang, and Chengming Li. 2023. "Digital Transformation, Firm Boundaries, and Market Power: Evidence from China’s Listed Companies" Systems 11, no. 9: 479. https://doi.org/10.3390/systems11090479