Does corporate digitization affect investment efficiency? Evidence from China

This paper investigates whether corporate digitization affects investment efficiency. Using the data of Chinese publicly listed firms from 2012 to 2020, we find that corporate digitization is positively associated with investment efficiency. This conclusion is robust after a series of robustness tests, including adopting IV estimation and using different measures of corporate digitization and investment efficiency. Heterogeneity analysis shows that the effect of corporate digitization is more pronounced for firms with over-investment problems. Overall, our findings enrich the literature on the economic consequences of corporate digitization and provide implications for improving investment efficiency.