Firm Survival in China's Steel Industry: The Impact of <scp>ICT</scp>

ABSTRACT While China's steel industry has experienced significant entry and exit, our understanding of the factors determining firm survival within this sector remains limited. This paper aims to identify factors influencing firm survival from an ICT perspective. Utilising a meticulously verified dataset on firm exit, we observe that the average exit rate of Chinese steel firms stands at 11.4% from 2000 to 2013. The results of a complementary log–log model show that ICT adoption significantly reduces the hazard rate. A two‐step IV probit model and a cross‐sectional model verify the ICT impact. We further adopt a mediational model to detect the mechanism of the ICT impact. Total Factor Productivity (TFP) functions as a vital transmission mechanism. Heterogeneity tests demonstrate that the ICT impact is less significant for State‐Owned Enterprises (SOEs) during the study period. Our findings support the digitalisation of steel firms.