| As the scale and diversification of Chinese listed companies continue to expand,the business model of enterprise groups expanding their operations through investing in a new subsidiary company has become increasingly prevalent.In 2021,the proportion of listed enterprise groups in China with subsidiary companies has reached as high as about 98%,with an average of nearly 26 subsidiary companies per enterprise group and an average business proportion of approximately 45.35%for their subsidiary companies.In theory,compared to individual enterprises,enterprise groups can reduce transaction costs,make up for external market deficiencies,improve internal resource allocation efficiency,and form a risk-sharing effect within the group.However,as the scale and number of enterprise groups in China rapidly grow,the expansion of enterprise groups has gradually shown characteristics of "gathering without unification" and "being large but not strong" due to excessive control resulting in a lack of motivation among the group’s subsidiary companies or insufficient control leading to opportunistic behaviors by subsidiary companies ultimately causing harm to the entire enterprise group(Cheng et al.,2020;Zhang and Wu,2011).Therefore,effective control of enterprise groups is of great practical significance for easing the "gathering without unification" phenomenon of enterprise groups in China,promoting their coordinated development,enhancing their strength and size,and promoting the high-quality development of China’s capital market.The core of enterprise group management lies in power distribution between parent and subsidiary companies.Currently,numerous scholars have conducted extensive research on the various factors affecting power allocation within enterprises from multiple perspectives,such as the characteristics of parent and subsidiary companies(Negandhi and Reimann,1973;Zheng et al.,2020),external factors faced by enterprises(Bloom et al.,2012;Deng et al.,2016;Li,2020),management characteristics and corporate governance(Graham et al.,2015;Ma and Du,2019),and organizational processes(Hempel et al.,2012).However,only few scholars have included enterprise digital transformation under the continually iterative wave of digital technology into the analytical framework of power allocation within enterprise groups.At the same time,when exploring the influencing factors of power allocation within enterprises,the existing literature typically regards internal power as a whole(Bloom et al.,2012)or focuses on a single power attribute(Liu et al.,2018;Li,2020).However,internal power is not unified but can be divided into decision-making and financial power,representing different resource elements.In theory,efficient power allocation within an enterprise is not centralized or decentralized but differentiated management efficiency based on different "resource elements." Thus,further clarification of the impact of digital transformation on various types of power allocation within enterprise groups has essential practical and theoretical significance for effective group control of Chinese enterprise groups.The report of the 20 th National Congress of the Communist Party of China on building a modern industrial system pointed out that we should accelerate the construction of Digital China,accelerate the development of the digital economy,and promote the deep integration of the digital economy and the real economy.The process of enterprise digital transformation is essentially a change from the "industrial management model" to the "digital management model." Introducing digital technology into the existing enterprise management framework promotes the systematic reshaping of information structure,management methods,operation mechanisms,and production processes compared to the industrial system(Liu et al.,2021).Currently,scholars have conducted extensive research on the mechanism of enterprise digital transformation from the perspective of information release and governance effects(Luo and Wu,2021;Nie et al.,2022)and the "cost reduction and efficiency increase" effect(Chen and Zhou,2021;Zhao et al.,2021).In theory,the "information mining" effect and the "cost reduction and efficiency increase" effect brought about by enterprise digital transformation may have different degrees of impact on the allocation and management of decision-making resources(information)and financial resources within enterprise groups,thereby affecting the allocation of decision-making power and financial power between parent and subsidiary companies within enterprise groups.However,existing research needs an extension of the research perspective on the economic consequences of enterprise digital transformation to the power allocation model within enterprise groups and between parent and subsidiary companies.Existing literature on the economic consequences of enterprise digital transformation primarily explores from multiple angles,including audit and information disclosure quality(Zhai and Li,2022;Nie et al.,2022),corporate operating activities(Chen and Zhou,2021;Xiao et al.,2022),corporate investment and financing activities(Kim et al.,2018;Liu et al.,2021),output and performance(Barba-Sanchez et al.,2018;Zhao et al.,2021),and capital market performance and corporate value(Wu et al.,2022;Huang et al.,2021;Wu et al.,2021).Fewer studies focus on extending the research scenario of the economic consequences of enterprise digital transformation to the power allocation model between parent and subsidiary companies within enterprise groups.There is also limited research that systematically examines the heterogeneous impact of digital transformation on different power allocations within the enterprise group based on different attributes and the economic consequences they respectively bring.Based on this,the core research question of this paper is whether digital transformation will impact the power allocation within enterprise groups,what kind of impact it will have,and what the underlying mechanisms and theoretical mechanisms are.Whether the impact of digital transformation on power allocation within enterprise groups be heterogeneous due to different power attributes?Specifically,how will digital transformation affect the decision-making power allocation between parent and subsidiary companies within the enterprise group?How will digital transformation affect the financial power allocation between parent and subsidiary companies within the enterprise group? Specifically:(1)How will digital transformation affect the financing power allocation between parent and subsidiary companies within the enterprise group?(2)How will digital transformation affect the cash-disposal power allocation between parent and subsidiary companies within the enterprise group?Referring to existing research(Cheng et al.,2020;Lu and Zhang,2010),this paper uses the "dual-disclosure system" of financial information in listed companies in China to regard the listed company as the parent company and its numerous subsidiaries.It examines the power allocation model between parent and subsidiary companies within enterprise groups.The main research conclusions of this paper are as follows:Firstly,digital transformation can significantly promote the decentralization of decision-making authority within corporate groups;that is,digital transformation can significantly promote the inclination of decision-making authority allocation within corporate groups towards subsidiaries.Specifically,it is reflected as 1)the degree of a company’s digital transformation can significantly reduce the concentration of decision-making authority within the corporate group,which weakens the control of the group’s parent company over the decision-making authority of each subsidiary and promotes the decentralization of decision-making authority allocation within corporate groups.2)The degree of a company’s digital transformation can significantly increase the decentralization of decision-making authority within the corporate group,which enhances the decision-making control of group subsidiaries and promotes the decentralization of decision-making authority allocation within corporate groups.Tests based on the heterogeneity of digital transformation show that artificial intelligence technology,cloud computing technology,big data technology,and digital technology applications can all positively impact the decentralization of decision-making authority allocation within corporate groups.Furthermore,further analysis shows that the promoting effect of digital transformation on the decentralization of decision-making authority allocation within corporate groups is more significant when subsidiaries have more redundant resources,the vertical integration level of corporate groups is higher,the agency problem of subsidiaries is more significant,and the equity incentive is weaker.Economic consequence tests show that digital transformation can improve the innovation capability of corporate group subsidiaries by promoting the decentralization of decision-making authority allocation within corporate groups.Secondly,digital transformation can significantly promote the concentration of financing power allocation within corporate groups;that is,digital transformation can significantly promote the inclination of financing power allocation within corporate groups towards the parent company.Specifically,it is reflected as 1)the degree of a company’s digital transformation can significantly increase the concentration of financing decision-making authority within the corporate group,which enhances the control of the group’s parent company over the financing decision-making authority and promotes the concentration of financing power allocation within corporate groups.2)The degree of a company’s digital transformation can significantly reduce the dispersion of financing decision-making authority within the corporate group,which weakens the control of each subsidiary over financing decision-making authority and promotes the concentration of financing power allocation within corporate groups.Tests based on the heterogeneity of digital transformation show that big data technology has the most significant positive impact on promoting the concentration of financing power allocation within corporate groups.Heterogeneity tests show that the promoting effect of digital transformation on the concentration of financing power allocation within corporate groups is more significant when there is a higher business risk,higher labor intensity,and more subsidiaries.Finally,digital transformation can significantly promote the dispersion of cash power allocation within corporate groups;that is,digital transformation can significantly promote the inclination of cash power allocation within corporate groups towards subsidiaries.Specifically,it is reflected as 1)The degree of a company’s digital transformation can significantly reduce the concentration of cash management decision-making authority within corporate groups,which weakens the control of the group’s parent company over cash management decision-making authority and promotes the dispersion of cash power allocation within corporate groups.2)The degree of a company’s digital transformation can significantly increase the dispersion of cash management decision-making authority within corporate groups,which enhances the control of subsidiaries over cash management decision-making authority and promotes the dispersion of cash power allocation within corporate groups.Tests based on the heterogeneity of digital transformation show that artificial intelligence technology,cloud computing technology,big data technology,and digital technology applications can all promote the dispersion of cash power allocation within corporate groups.Heterogeneity tests show that the promoting effect of digital transformation on the dispersion of cash power allocation within corporate groups is more significant when there is lower overall business risk,more investment opportunities,higher governance costs,and weaker debt constraints.Economic consequence tests show that digital transformation significantly improves the operational efficiency of corporate groups,and this effect becomes stronger as the dispersion of cash power allocation within corporate groups increases.Compared with existing research,the contributions of this paper can be summarized as follows:Firstly,this research expands on the existing research on factors affecting power allocation in enterprises from the perspective of digital transformation.Existing research has explored the factors influencing various types of power allocation within enterprises from multiple perspectives,such as parent and subsidiary company characteristics(Negandhi and Reimann,1973;Zheng et al.,2020),external factors faced by enterprises(Bloom et al.,2012;Deng et al.,2016;Li,2020),management characteristics and corporate governance(Graham et al.,2015;Ma and Du,2019),organizational processes(Hempel et al.,2012)and so on.However,more attention should be paid to the digital transformation of enterprises.This paper provides new empirical evidence regarding factors affecting power allocation in enterprises from the perspective of digital transformation,which is a novel contribution to the existing literature on this topic.Secondly,this paper expands the research content and logical framework of power allocation in enterprises.Existing literature on factors influencing power allocation within enterprises typically treats internal power as a whole(Bloom et al.,2012)or explores only single attributes of power(Liu et al.,2018;Li,2020).This paper splits the power of enterprise groups into decision-making and financial power and attempts to provide a valuable supplement to the existing literature on factors affecting power allocation within enterprises by examining the differentiated impact of digital transformation on power allocation among parent and subsidiary companies within enterprise groups.Thirdly,from the perspective of power allocation among parent and subsidiary companies within enterprise groups,this paper enriches the analysis framework of existing literature on the economic consequences of enterprise digital transformation.Existing literature on the economic consequences of enterprise digital transformation primarily focuses on audit and information disclosure quality(Zhai and Li,2022;Nie et al.,2022),business activities(Chen and Zhou,2021;Xiao et al.,2022),financing activities(Kim et al.,2018;Liu et al.,2021),output and performance(Barba-Sanchez et al.,2018;Zhao et al.,2021),as well as capital market performance and corporate value(Wu et al.,2022;Huang et al.,2021;Wu et al.,2021)from multiple perspectives.Few studies have extended the exploration of the economic consequences of enterprise digital transformation to the power allocation patterns among parent and subsidiary companies within enterprise groups.This paper provides a valuable supplement to the existing literature on the economic consequences of enterprise digital transformation by examining the power allocation among parent and subsidiary companies within enterprise groups.Fourthly,from the perspective of enterprise digital transformation,this paper provides a valuable supplement to existing research on financial resource allocation within enterprise groups.Existing literature has extensively discussed the financial resource allocation patterns within enterprise groups from macro perspectives such as monetary policy(He et al.,2017),political risk(Kesternich and Schnitzer,2010),industrial policy(Wu et al.,2019),and credit resource supply(Tong and Li,2021),as well as micro-enterprise perspectives such as subsidiary diversification(Ma et al.,2018),internal capital markets(Gopalan et al.,2007),and equity structure and nature(Bianco and Nicodano,2006;Li and Yan,2021).However,relatively few studies have incorporated enterprise digital transformation into the financial resource allocation analysis framework within enterprise groups.This paper provides new empirical evidence for the impact factors of debt and cash asset resource allocation among parent and subsidiary companies within enterprise groups from the perspectives of financing power allocation and cash control power allocation based on enterprise digital transformation. |
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