Impact of China’s comprehensive financial reform pilot zone on digital transformation of manufacturing companies. Evidence from listed companies

Abstract

The establishment of the pilot financial reform zone is aimed at promoting regional financial supply-side structural reform. By giving localities broader financial autonomy, local governments are incentivized to target the “pain points and blockages” in financial services to the real economy, thus having a significant impact on the development and transformation of micro enterprises. Based on micro data of A-share listed manufacturing enterprises in Shanghai and Shenzhen from 2010–2021, this paper uses the double difference method (DID) to explore the impact of the establishment of a comprehensive financial reform pilot zone on the digital transformation of micro manufacturing enterprises and its mechanism. The results found that the pilot zone of comprehensive financial reform significantly improved the digitalization of manufacturing enterprises. Specifically, it effectively promotes the digital transformation of enterprises by reducing their financing costs and promoting their physical investment levels. In particular, it has had a stronger positive impact on the digital transformation of non-state-controlled enterprises, competitive enterprises, and labor-intensive and technology-intensive manufacturing enterprises. The results of the present study can provide a reference experience for other regions to carry out financial reforms to serve the transformation and upgrading of enterprises.

Keywords:

• comprehensive financial reform pilot zone
• digital transformation of enterprises
• double difference model

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1. The concept of “digital transformation” was first introduced by Negroponte (1997), who considered the use of digital technologies in the production process and in business interactions, i.e., the reorganization of digitalization for various production relationships, as digital transformation.

2. Source from the “2021 China Enterprise Digital Transformation Index Research Report” jointly compiled by Accenture and the National Industrial Information Security Development Research Center under the Ministry of Industry and Information Technology.

Additional information

Notes on contributors

Jianjiang Liu

Jianjiang Liu is a Professor and Doctoral supervisor at the School of Economics and Management of Changsha University of Technology. His vast research interest include but not limited to Industrial transformation and upgrading, Sino US Economics and Trade Relations, High Housing Prices.

Jie Cheng

Jie Cheng is Master candidate at the School of Economics and Management of Changsha University of Science and Technology. His research area includes Applied economics,industrial economics.

Fidelis Ayangbah

Fidelis Ayangbah is a Ph.D. candidate at the School of Economics and Management of Changsha University of Science and Technology. His rich professional experience cut across operations and Finance. His main research interests include Strategic Management, Enterprise Management, Trade Relations, and International Finance. Email: [email protected]