Status Shocks and Digital Transformation: Evidence from Chinese Niche Champions.

Existing firms may need to radically change themselves to succeed in the emerging digital world, and digital transformation is an important way to do so. So what drives firms' digital transformation? This study establishes a link between positive status shocks and firms' digital transformation. We have exploited the unique empirical opportunity generated by the release of Niche Champions in China since 2016. Difference-in-difference analyses on matched samples show that status shock is positively related to a firm's digital transformation. We further find that human capital enhances, while managerial myopia weakens the effects of status shocks on digital transformation. The implications of our research for digital transformation and status research are discussed. [ABSTRACT FROM AUTHOR]