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Enterprise's R&D and Innovation Management

Digital Transformation and Corporate Innovation Performance: the Regulatory Effect of Internal Pay Gap 

Wu Tong1 , Ren Guangqian2 , Lai Huanfeng2 

(1.Editorial Department of Zhengzhou University Journal, Zhengzhou 450001, China; 2.School of Business, Zhengzhou University, Zhengzhou 450001, China)

Abstract: The report of the 20th National Congress of the Communist Party of China empha⁃ sizes the need to "further integrate the digital economy with the real economy". It calls for the ac⁃ celerated development of future industrial chains based on new quality productivity and making  up for the shortcomings in the supply chain of Chinese industrial enterprises by strengthening in⁃ dependent innovation to accelerate the intelligent, green, and integrated development of China's  industries. In the new round of global scientific and technological revolution, digital transforma⁃ tion, as a key link, has become a focus of extensive discussion in academia regarding its impact  on enterprise innovation performance. Although existing research has provided macroscopic evi⁃ dence of the varying effects of different levels of digital transformation on innovation perfor⁃ mance, there remains a lack of investigation into the regional and property rights heterogeneity of  digital transformation. Digital transformation in enterprises is a systematic project. Innovation be⁃ havior is characterized by strong externalities, intersectionality, and complexity. Consequently, achieving high-quality development amidst high investment, high risk, and lengthy innovation  cycles presents a challenge, particularly concerning the relationship between the internal salary gap and optimal innovation performance. To discuss this issue, this study analyzes China's A-share listed companies from 2007 to  2021 to empirically test the relationship between enterprise digital transformation and innovation  performance, and the regulatory role of internal salary gaps in this relationship. The findings in⁃ dicate that digital transformation has a significant positive impact on enterprise innovation per⁃ formance, and this conclusion still holds after a series of robustness tests. Additionally, internal  salary gaps play a positive regulatory role in the relationship between enterprise digital transfor⁃ mation and innovation performance. Heterogeneity analysis shows that the positive regulatory ef⁃ fect of internal salary gaps on the relationship between enterprise digital transformation and inno⁃ vation performance is more pronounced in enterprises located in eastern regions, state-owned  enterprises, and those receiving high levels of government subsidies. This research enriches  the existing literature on the impact of enterprise heterogeneity on digital transformation and pro⁃ vides a new perspective for regional development and policy formulation. Compared with existing research, the marginal contributions of the study are mainly re⁃ flected in three aspects. First, it enriches the relevant research on the impact of digital transfor⁃ mation on enterprise innovation performance and provides a new empirical foundation for  innovation-driven, high-quality development under the current digital economy background. Second, it delves into the internal factors influencing the relationship between digital transforma⁃ tion and enterprise innovation performance by examining internal salary gaps and provides valu⁃ able guidance for enterprises to develop internal systems that align with digital transformation ef⁃ forts. Third, it explores the heterogeneous influence between digital transformation and innova⁃ tion performance from the aspects of regional development, property rights nature, and govern⁃ ment subsidies. This research expands the literature on enterprise digital transformation and in⁃ novation performance and provides useful strategic recommendations for both governments and  managers in formulating innovation performance strategies. 

Key words: digital transformation; internal pay gap; corporate innovation performance; regula⁃ tory effect; heterogeneity analysis