Talking and Walking: Corporate Digital Transformation and Government Subsidies

The importance of corporate digital transformation is increasingly conspicuous. Nevertheless, many companies are still in the dilemma of wanting to transform but not daring to transform. This study introduces the talking and walking paradigms of digital transformation and examines the impacts of corporate digital transformation talking and walking on government subsidies based on the signaling theory. Based on panel data from listed manufacturing companies in China from 2008 to 2022, our empirical findings using the fixed effects model posit that digital transformation talking and walking enable companies to receive more government subsidies. Furthermore, corporate digital transformation talking can strengthen the positive impact of corporate digital transformation walking on government subsidies. The above results hold after considering endogeneity and employing robustness analysis. This study expands the research perspective on digital transformation and provides new insights into the behavioral logic behind the allocation of government subsidies.