Impact of Substantial and Symbolic Peer Competition in Digital Transformation on Firm Growth: Evidence From China's Listed Companies

Abstract

This study investigates how peer competition strategies in digital transformation affect firm growth by distinguishing substantial and symbolic peer competition strategies. Drawing upon the Hotelling framework, a two‐stage consumer choice model was constructed, and an empirical analysis was carried out using Chinese non‐financial A‐share listed companies spanning from 2007 to 2021. Core results show that substantial peer competition (e.g., based on digital transformation investment) significantly boosts firm growth, while symbolic peer competition (e.g., based on digital transformation disclosures) has no significant effect. We further explore the effect heterogeneity across industries and market structures. This study indicates that substantive digital transformation efforts are crucial for promoting enterprise growth.