Common Ownership and Enterprise Digital Transformation: Institutional Synergy and Oversight Governance Perspectives

Digital transformation is a core strategic choice for enterprises to build sustained competitive advantages, which constitutes a critical driver for advancing corporate sustainable development, and how to effectively help enterprises realize digital transformation is a hot and difficult issue discussed in academia and industry. The important impact of common ownership on micro-enterprise behavior may become an important grip for enterprise digital transformation. Using a sample of Chinese A-share listed companies from 2007 to 2021, this study measures firms’ level of digital transformation by the ratio of year-end digital transformation-related intangible assets disclosed in the notes to financial statements to total intangible assets. We find that common ownership has a positive impact on corporate digital transformation, and the conclusion still holds after a series of endogeneity and robustness tests. The results of the mechanism test indicate that common ownership promotes corporate digital transformation by leveraging institutional synergies and supervisory governance effects. Further discussion reveals that the positive impact of common ownership on enterprise digital transformation is more significant in samples with faster economic growth and state-owned enterprises. This study provides new theoretical support and empirical evidence for the role of common ownership in promoting sustainable development of enterprises.