Does digital transformation improve the operational efficiency of Chinese power enterprises?

With the ongoing reform of the electric power system, more and more power enterprises are adopting digital transformation (DT) as a key strategy to stay competitive in the market. This study aims to examine the potential impact of DT on the operational efficiency (OE) of power enterprises, as well as to investigate the underlying mechanisms, which have received limited attention in prior research. Our findings suggest that DT indirectly improves the OE of power enterprises by promoting innovation, enhancing capital utilization rates, and easing financial constraints. Additionally, DT plays a more significant role in improving OE in a fiercely competitive industry environment. Finally, large, state-owned, and growing power firms have benefited more from DT than other types of firms.

Automated summary

Digital transformation improves the operational efficiency of power enterprises indirectly by promoting innovation, enhancing capital utilization rates, and easing financial constraints. The impact of digital transformation on operational efficiency is more significant in a fiercely competitive industry environment. Large, state-owned, and growing power firms have benefited more from digital transformation than other types of firms.