Research on the Impact of Digital-Physical Technology Integration on Firm Resilience

Abstract

Digital-physical technology integration is an essential part of the deep convergence of the digital and physical economies, contributing significantly to improving the survival and growth opportunities of firms in uncertain environments. Using a sample of Shanghai and Shenzhen A-share listed companies from 2015 to 2024, this paper empirically investigates the impact of digital-physical technology integration on firm resilience and the underlying mechanisms. The results indicate that digital-physical technology integration significantly enhances firm resilience. The baseline regression findings remain robust after introducing individual and time fixed effects. The conclusion holds following a series of robustness tests, including instrumental variable estimation, propensity score matching, heteroskedasticity-robust standard errors, exclusion of municipalities, alternative winsorization thresholds, and sample period adjustments. Mechanism tests reveal that digital-physical technology integration improves firm resilience through two primary channels: augmenting innovation capacity and alleviating financing constraints. Heterogeneity analysis further demonstrates that this positive effect is more pronounced among non-state-owned enterprises, non-polluting firms, high-tech industries, firms with lower market power, enterprises located in eastern regions, and those receiving higher government subsidies. This study extends the existing literature on the enabling effects of digital-physical technology integration from the perspective of firm resilience, providing empirical support for firms seeking to build resilience in the digital age and offering theoretical foundations and practical insights for policymakers aiming to promote deeper digital-physical integration and more efficient resource allocation.