Has digital finance improved enterprise digital transformation of China? Moderating effects of the agglomeration of digital industries

Developing the digital economy is inseparable from enterprise digital transformation. Using Chinese listed companies’ data from 2011 to 2018, we investigate the impact of digital finance and the agglomeration of digital industries (ADI) on the digital transformation of Chinese manufacturing enterprises. We find that digital finance and ADI significantly advance the digital transformation of manufacturing enterprises. Specifically, ADI reduces dependence on regional digital finance, with the effect being more pronounced among state-owned enterprises and firms in China’s eastern provinces. Apart from the digital industry, placebo tests suggest that agglomeration of other sectors within the manufacturing services industry does not significantly impact enterprise digital transformation and has no interaction with digital finance. These findings remain valid after conducting the Poisson pseudo-maximum likelihood estimation method, confirming their robustness. Our findings provide a novel perspective on enterprise digital transformation, serving as a reference for policy-makers aiming to foster digital finance and ADI to facilitate corporate digital transformation in the manufacturing sector.