Digital Transformation and New-Quality Productivity: Evidence from Chinese Listed Firms

Abstract

The deep integration of the digital and real economies has become a key engine for high-quality economic growth. This paper examines how firm-level digital transformation affects new-quality productivity—a qualitative upgrade in productivity driven by digital technologies, data assets, and organizational complementarities—using firm-level data for Chinese listed companies. I find three main results. First, digital transformation significantly raises firms’ new-quality productivity. The effect is economically larger for non-state firms and for firms operating in more competitive (less monopolistic) industries than for state-owned or highly monopolized firms. Second, digitalization raises productivity chiefly through three channels: it lowers managerial costs and raises managerial efficiency, it increases total factor productivity, and it optimizes the firm’s talent composition. Third, these mechanisms together account for a substantial share of the overall digitalization effect. The findings underscore the role of corporate digitalization in generating qualitative productivity gains and suggest policies that facilitate firm digital adoption and complementary organizational and human-capital investments.