Impact of digital transformation on corporate performance in the construction industry

With the development of digital technology, the construction industry is undergoing a digital transformation (DT). This study investigates the impact of DT on corporate performance, specifically the ratio between the market value of a corporation's tangible assets and the replacement value of those assets (i.e., Tobin's Q), within the Chinese construction industry. By utilizing panel data from A-share listed construction corporates between 2009 and 2022, we apply double fixed-effects regression analysis to investigate the relationship between DT and corporate performance. The empirical results indicate that DT is positively correlated with corporate performance. Additionally, supply chain concentration (SCC) plays a mediating role in this link. Specifically, a suppression effect emerges, namely, an increase in DT suppresses SCC, which in turn leads to improved corporate construction performance. Moreover, the positive correlation between DT and corporate performance is more pronounced among corporates in the northern region and at the low-marketization level. The findings provide important insights for construction corporates and government agencies to cooperate in cultivating practical skills such as building information modeling (BIM) technology, supply chain management, and big data analysis for better DT.