Driving Enterprise Digital Transformation: Unveiling the Significance of E-Commerce Demonstration City in China

Initiated in 2009, the National E-commerce Demonstration City (NEDC) policy is a strategic initiative by the Chinese government. Its purpose is to boost e-commerce growth and drive economic transformation. Over time, this program has expanded, serving as a catalyst for technological innovation, resource integration, and the progression of the digital economy. Given this backdrop, how should enterprises seize the development opportunities offered by the NEDC policy to promote digital transformation? Applying a multi-period difference-in-differences (DID) model and utilizing data from publicly listed companies on the Shanghai and Shenzhen stock exchanges from 2009 to 2019, we empirically examine the mechanism by which the NEDC policy influences enterprise digital transformation (EDT). The results reveal that the NEDC policy significantly promotes EDT and passes a series of robustness tests. Heterogeneity analysis reveals varied impacts on EDT, particularly in high technology-density, low talent-density industries, central cities, and downstream enterprises in the industrial chain. Further research suggests that the policy stimulates EDT by fostering transformation and upgrading in regional industrial structures, as well as by coordinating the industrial chain.