Abstract

This study investigates the empirical relationship between diversification strategies—specifically geographic and product diversification—and enterprise digital transformation. Utilizing a sample of Chinese publicly listed companies from 2009 to 2021, along with comprehensive analyses and tests, the study finds that greater geographic and product diversification significantly promote enterprise digital transformation. Additionally, a heterogeneity analysis reveals that state ownership does not influence geographic diversification but does impact product diversification. Conversely, executives' overseas experience affects geographic diversification but not product diversification. Furthermore, the geographical location of firms emerges as a potential factor influencing digital transformation. These findings enhance the understanding of factors that drive enterprise digital transformation, offering both theoretical and empirical insights into the feasibility of digital transformation through the lens of diversification strategies. The results also provide practical insights for companies in the planning or implementation stages of digital transformation.