Employee Ownership and Firm Digital Transformation

Abstract The development of digital technologies has triggered the digital transformation of organizations, enabling business model innovation. With the rise of a human‐centred view of digitalization, previous studies have been devoted to exploring how leadership drives digitalization, overlooking the role of employees as a key stakeholder. Motivated by this gap, based on agency theory, we investigate how employee ownership affects digital transformation in firms. Further, we identify vital contingencies based on heterogeneity in human resource management under the ability–motivation–opportunity framework. Analysing data on Chinese listed firms from 2015 to 2021, we find that the adoption of employee ownership promotes firms’ digital transformation, and that this positive effect is moderated by R&D personnel (ability), female CEO (motivation) and state ownership (opportunity). Our findings reveal the role of employees in the digital transformation process, which deepens our understanding of the literature on employee ownership and business model innovation.