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Digital Wings: The Effect of Digital Technology Adoption on Market Power

Haodan Tang & Gang Xu

Journal of Economics & Management Strategy2025https://doi.org/10.1111/jems.12630article
AJG 2ABDC A
Weight
0.50

Abstract

This paper evaluates the causal impact of digital technology adoption (DTA) on firms' market power using data from Chinese listed manufacturing companies. Employing staggered difference‐in‐differences strategies, we find compelling evidence that DTA has a significant and substantial positive impact on market power. We also find supportive evidence for several underlying channels through which this impact occurs: improved research and development intensity, the upgrading of human capital structure, enhanced manufacturing servitization, and increased external attention. Furthermore, we establish an inverted U‐shaped relationship between the share of DTA firms and resource misallocation within the industry‐province dimension. This study contributes to the existing literature on the digitalization paradox by extending the investigation of the market performance of digital transformation to the context of developing countries.

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https://doi.org/https://doi.org/10.1111/jems.12630

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@article{haodan2025,
  title        = {{Digital Wings: The Effect of Digital Technology Adoption on Market Power}},
  author       = {Haodan Tang & Gang Xu},
  journal      = {Journal of Economics & Management Strategy},
  year         = {2025},
  doi          = {https://doi.org/https://doi.org/10.1111/jems.12630},
}

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Evidence weight

0.50

Balanced mode · F 0.40 / M 0.15 / V 0.05 / R 0.40

F · citation impact0.44 × 0.4 = 0.18
M · momentum0.65 × 0.15 = 0.10
V · venue signal0.50 × 0.05 = 0.03
R · text relevance †0.50 × 0.4 = 0.20

† Text relevance is estimated at 0.50 on the detail page — for your query’s actual relevance score, open this paper from a search result.