Computing power projects and digital transformation of enterprises: Evidence from the “East data, West computing” project

Computing power is becoming a new productive force driving high–quality business growth worldwide. How to lower barriers to computing power usage and facilitate enterprise digital transformation through the systematic deployment of computing power projects remains unclear. Using China’s “East data, West computing” project as a quasi-natural experiment, we investigate its impact on the digital transformation of enterprises and find that it significantly promotes this transformation in the region, due to three factors: the optimization of the computing power environment, the strengthening of digital R&D and innovation and government digital subsidies and support. Heterogeneity analysis reveals that the facilitating effect is more pronounced in state‑owned enterprises, asset‑light firms and regions with better computing power infrastructure. Furthermore, the effect is stronger in regions with higher energy consumption and better data transmission conditions, suggesting a potential relocation of computing power demand away from energy‑intensive areas. From the perspective of developing high‑quality enterprises, firms in computing power hub nodes with more advanced digital transformation achieve higher total factor productivity. From the perspective of cross‑regional resource flows, the project significantly boosts out‑of‑region investment by enterprises located in the Eastern hub node, reflecting their strategic initiative to actively respond to the project. Our paper contributes to the literature on the drivers of digital transformation in enterprises and uses China’s experience and evidence in constructing and implementing policies related to global computing power infrastructure.