Powerful weapon? The impact of institutional investor digital transformation activism on high-quality development of enterprises

High-quality development of enterprises (HDE) is the inevitable result of the synergistic promotion between the capital market and the real economy. By leveraging digital transformation to connect institutional investors with the real economy, this paper examines how institutional investor digital transformation activism (IIDTA) enhances HDE. We empirically test our hypotheses using the data from Chinese listed companies spanning from 2010 to 2022. Our findings indicate that IIDTA effectively empowers HDE. This facilitating effect is attenuated by analyst following (AF) but enhanced by supply chain integration (SCI). Finally, we elucidate the characteristics of IIDTA on HDE from the perspectives of bankruptcy risk and firm nature. The insights can assist institutional investors in addressing traditional management challenges and strengthening inter-firm collaboration to adapt to HDE in the digital era.