Title: (How) does digital transformation promote boundary-spanning strategies? Evidence from Chinese firms' unrelated diversification

Authors: Di Zhu; W.G. Will Zhao; Qin Wu; Xiao Zhang

Addresses: School of Business, Nanjing Audit University, Nanjing, China ' Stratford School of Interaction Design and Business, University of Waterloo, Stratford, Canada ' Business School, Nanjing Normal University, Nanjing, China ' School of Business, Nanjing University, 16 Jinyin Street, Gulou District, Nanjing, Jiangsu Province, China

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.

Keywords: digital innovation; unrelated diversification; industry shakeouts; performance expectation gap; corporate strategy; digital transformation.

DOI: 10.1504/IJTM.2025.143583

International Journal of Technology Management, 2025 Vol.97 No.2/3, pp.385 - 409

Received: 26 Sep 2022
Accepted: 24 Apr 2023
Published online: 02 Jan 2025 *

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