Tax Incentives, Business Environment and Digital Transformation of Enterprises

Drawing on information from Shanghai and Shenzhen's A-share non-financial listed firms between 2013 and 2020,This study uses empirical research to investigate how tax incentives affect businesses' digital transformations and how the business environment influences such transformations. The findings indicate that: (1) Tax incentives significantly improve an organization's ability to undergo digital transformation. (2) The business environment can significantly positively regulate the relationship between tax incentives and enterprise digital transformation. (3)Additionally, this paper conducts a heterogeneity analysis based on the regional differences of the enterprises. The results show that, while the tax incentives of the enterprises in the central and western regions do not significantly affect the promotion of enterprise digital transformation, the analysis of the eastern region's enterprises is in line with the analysis of the sample as a whole. The results of this paper provide an important reference for standardizing tax policies and improving the business environment, and promoting enterprises to move towards digitalization.