The power of peers: how common ownership networks shape corporate digitalization

Purpose This study aims to investigate peer influence mechanisms in corporate digital transformation within common ownership networks, and extends social network theory in strategic management by examining how these interconnected ownership structures shape firms’ transformation strategies. Design/methodology/approach Using panel data from Chinese A-share listed companies (2014–2023), this study uses social network analysis to construct common ownership networks and applies econometric models to test for peer effects. The research further examines network centrality as a moderator and the influence of industry leaders’ demonstration effects on follower firms. Findings The results confirm robust peer effects on digital transformation decisions within common ownership networks. Network centrality enhances these effects, rendering centrally located firms more susceptible to peer influence. Industry leaders accelerate transformation among follower firms through demonstration effects. Information diffusion via network ties, competitive pressure and organizational learning are identified as key underlying mechanisms. The study also documents significant heterogeneity in these effects across ownership structures, geographical concentrations and industrial characteristics, and finds that innovation capability mediates the relationship between digital transformation and corporate productivity. Originality/value This research contributes to network governance literature by empirically demonstrating the influence of common ownership networks on corporate digital transformation. It offers a framework identifying key peer effect mechanisms (organizational learning, information diffusion and competitive pressure) and clarifies the moderating role of network centrality. These findings deepen theoretical understanding and provide practical insights for the strategic management of digital transformation.