Digital Transformation and Export Product Quality: The Roles of Production Efficiency and Financing Constraints

ABSTRACT The impact of digital transformation on export product quality is a critical issue in the context of the rapidly advancing global digital economy. Although prior studies have examined the relationship between digitalization and firm performance, limited attention has been paid to its specific effect on export product quality. Using data from 6184 Chinese manufacturing firms over the period from 2007 to 2015, this study investigates the link between digital transformation and export product quality. We find a U‐shaped relationship where the initial stages of digitalization lead to a decline in quality due to high transformation costs, but as digitalization progresses, firms experience significant improvements in product quality. Our findings highlight two key mechanisms: improved production efficiency and the alleviation of financing constraints. This study underscores the importance of digital transformation in enhancing international competitiveness, with particularly strong effects in foreign‐owned firms, capital‐intensive industries, and coastal regions.