Digital transformation and OFDI efficiency: the moderating role of GVC expansion and heterogeneous innovation

Purpose This study aims to investigate the influence of digital transformation and outward foreign direct investment (OFDI) efficiency in emerging markets. By integrating the moderating effects of global value chain expansion and heterogeneous innovation, this research seeks to explore the boundary conditions under which digital transformation’s influence on OFDI efficiency varies. Design/methodology/approach This study adopts a multiple regression model to conduct empirical analysis using a cross-section data set of 1,744 observations from 479 listed firms across 96 countries between 2008 and 2022. Findings The findings of this study indicate an inverted U-shaped relationship between digital transformation and OFDI efficiency. Additionally, the above-mentioned relationship is flattened for firms that conducted global value chain (GVC) expansion and steepened for firms at high levels of heterogeneous innovation. Originality/value This study enriches information asymmetry theory by revealing how digital transformation reduces information gaps but introduces complexity costs, forming a non-linear impact on OFDI efficiency. Moreover, this study contributes to OFDI literature by highlighting the impact of GVC expansion and heterogeneous innovation.