What drives firms towards digital transformation adoption: evidence from Vietnam

Purpose This study aims to identify factors affecting firms' adoption of digital transformation by examining firm- and macro-level factors. Design/methodology/approach A logistic regression model was employed to examine a sample of 618 listed firms on Vietnamese stock exchanges from 2012 to 2021. Findings The research results reveal that firm performance, size and age have significant positive impacts on digital transformation adoption (DTA), indicating that well-resourced and experienced firms are more inclined to embrace digital initiatives. In contrast, financial leverage and liquidity are significantly negatively related to DTA, suggesting that financial constraints or conservative financial strategies act as barriers. Both macroeconomic variables – GDP and inflation – exert a significant negative influence, highlighting the limits of economic growth in the absence of institutional support. Research limitations/implications The research suggests that firms should leverage strong performance and organisational maturity to drive digital investment, while recognising that liquidity alone does not ensure readiness without leadership and strategic focus. For policymakers, the results stress that fostering digital transformation requires more than GDP growth – it demands supportive institutions, incentives and national strategies. Originality/value This study offers an empirical analysis of digital transformation in Vietnam, an under-researched emerging economy. By combining firm-level financials and macroeconomic factors within a multi-theory framework, it reveals the novel finding that liquidity negatively relates to digital adoption – contradicting conventional wisdom. The research highlights how institutional voids and uncertainty hinder transformation, providing a localised yet generalisable model for other emerging markets.