Digital Transformation and the Evolution of Control Structures—Evidence From State‐Owned Enterprises in China

ABSTRACT This study explores the impact of digital transformation on the board‐level control structures of state‐owned enterprises (SOEs) utilizing intellectual capital and stewardship theory. Using empirical analysis, the study found that after controlling for equity checks and balances, the digital transformation of SOEs enhanced non‐state shareholder control, which was more pronounced in commercial and high‐technology SOEs. The digital transformation in SOEs reduced principal‐agent costs, reduced political interference, and improved resource concordance, thereby enhancing the willingness and ability of non‐state‐owned shareholders to participate in governance. The information environment and financing constraints reinforced the above relationships. In addition, the digital transformation of SOEs gives rise to the spillover effect, improving incentive effectiveness and intellectual capital pay‐performance sensitivity without increasing costs. In the context of increasing the governance willingness of non‐state shareholders, the digital transformation of SOEs has significantly impacted corporate innovation and value. This study presents an in‐depth discussion of the governance effects of the digital transformation of SOEs in terms of control structures and offers insights for improving the quality and effectiveness of mixed‐ownership reforms.