(How) does digital transformation promote boundary-spanning strategies? Evidence from Chinese firms' unrelated diversification
by Di Zhu; W.G. Will Zhao; Qin Wu; Xiao Zhang
International Journal of Technology Management (IJTM), Vol. 97, No. 2/3, 2025

Abstract: The emergence of new generations of digital technologies has presented firms with important strategic opportunities at the corporate level. This study investigates the digital transformation - unrelated diversification link and theorises the role of industry shakeout and the performance expectation gap in said relationship. Our analysis based on the data of China's A-share listed manufacturing firms from 2015 to 2020 shows that: 1) the degree of firms' digital transformation is positively correlated to the degree of their unrelated diversification; 2) industry shakeout positively moderates the above relationship, i.e., in industries with a higher degree of shakeout, the positive digital transformation-unrelated diversification link is more pronounced; 3) the performance expectation gap negatively moderates the digital transformation-unrelated diversification link, i.e., the greater the performance expectation gap, the weaker the positive correlation between firms' digital transformation and their unrelated diversification.

Online publication date: Thu, 02-Jan-2025

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