Clan culture and digital transformation: Evidence from Chinese family firms

Abstract This paper examines the impact of culture norms on the digital transformation of Chinese listed family firms. We show that clan culture is negatively associated with firms' digital transformation degree. Exploring possible mechanisms through the logic of restricted socioemotional wealth theory, we find that clan culture inhibits digital transformation by increasing firms' risk aversion to restricted SEW loss. Further, the negative impact is stronger when the family exhibits a higher tendency to avoid such risk, and will ultimately harm firm future performance and value. The results indicate that external informal institution is an important antecedent of firms' disruptive innovation strategy.