Contents
CHAPTER1: INTRODUCTION............................................................................................... 2
1.1
Background of Study .............................................................................................. 2
1.2
Problem Statement ................................................................................................. 5
1.3
Research Question .................................................................................................. 8
1.4
Research Objectives ............................................................................................... 8
1.5 Significance of Study .................................................................................................. 9
CHAPTER2: THEORIES AND HYPOTHESIS DEVELOPMENT ...................................... 10
2.1 Underpinning Theories ............................................................................................. 10
2.1.1 Resource Dependence Theory....................................................................... 10
2.2 Resource Dependence Theory, Digital Transformation and Gender Diversity......... 12
2.3 Human Capital, Digital Transformation and Gender Diversity ................................ 13
2.4 First Mover Advantage, Digital Transformation and Gender Diversity ................... 15
CHAPTER3: RESEARCH DESIGN ...................................................................................... 17
3.1 Sample and Data Collection ..................................................................................... 17
3.2 Measurement of Variables ........................................................................................ 17
3.2.1 Dependent Variable ....................................................................................... 18
3.2.2 Independent Variables ................................................................................... 18
3.2.3 Mediating Variables ...................................................................................... 18
3.2.4 Control Variables........................................................................................... 19
3.2.5 Moderating Variables .................................................................................... 19
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CHAPTER1: INTRODUCTION
1.1 Background of Study
Businesses has been urged to change for recent decades in the context of the
globalization. This stimulated businesses to incorporate digital transformation and tools
for collaboration into their operations to achieve efficient integration (White, 2012),
since businesses have been demanded for going concern and being equipped with
competitive advantages. Hence, digital transformation has been of an increasing
importance under this background.
Additionally, as remarkable changes in the technology, environment, and socialeconomy for two decades, especially, the Fourth Industrial, requirements for corporate
governance have been updated. Specifically, the emergence of environment, society,
and governance (i.e. ESG) prompts sustainable transition of businesses. Simultaneously,
along with ESG, technology has been as a robust stimulus of development of corporate
governance currently (Samans & Nelson, 2020). Gender diversity in the corporate
governance is one of the most significant aspects of governance in ESG, which is a
focal point of solving the gender disparities in labour markets (UN WOMEN report).
Consequently, it is worthy to explore probably existing mechanism between the digital
transformation and gender diversity in corporate governance.
The world is witnessing the Fourth Industrial Revolution, which is also named
Industrial 4.0. It is characterized by a series of developments of disruptive technologies,
including clouds computing, blockchain, machine learning, virtual reality, augmented
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reality as well as other essential cutting-edge technologies. These progresses in
technologies are playing a role in reshaping corporate governance across the world.
One of its contributions is reallocation of social resources, becoming more equal among
different groups of people (Samans & Nelson, 2020).
Concurrently, women has confronted with the guilty in the workforce due to unequal
distribution of resources which is crucial to the female to acquire promotion in the work.
Additionally, #MeToo Movement provides another factor for prompt solution to the
problem of gender diversity in corporate governance, since companies that do not settle
gender discrimination in workplaces would have negative performance in the financial
costs, public images, and operational costs (Samans & Nelson, 2020). According to the
report published by UN Women (2024), structural social sexual disparities contribute
to female opportunities of acquiring deserved education, obtaining promotion, and
leveraging both capital and human resources, which leads the acceleration in the gender
inequality in the labour market. Besides, Goals 5 of Sustainable Development Goals
aims at promoting gender equality and women’s empowerment as well. One objective
of this goal is that the society should pay attention to guarantee female full and effective
participation in political, economic, and public decision makings, with equal chances
in the leader positions. The objective is facilitating women empowerment via utilizing
technologies, especially, information and communication technologies (Goal 5 |
Department of Economic and Social Affairs, n.d.).
Apart from aforementioned, digital transformation is beneficial to the emergence of
digital economy leading to the digital platform. The digital platform is featured with
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inclusion, allowing instantaneous accessibility of information and online collaboration
among staff (Javaid et al., 2024; Kang, 2022). This is advantageous to female
participation in the job.
In the year 2021, the Chinese parliament and the National People’s Congress passed
“Outline of the People's Republic of China 14th Five-Year Plan for National Economic
and Social Development and Long-Range Objectives for 2035” (2021), which is a plan
and a schedule of the development of the whole country in following five years with
long-term agenda for 2035. In part five of the document, it strategically formulated
objectives of accelerating development in digitalization-based area and constructing
digital China. Specifically, digital industrialization and industrial digitalization are two
sub-tasks under the acceleration of digitalization-based development and the
construction of digital China. Digital industrialization focuses on constructing digital
infrastructure, such as, artificial intelligence, big data, cyber security and so on.
Industrial digitalization pays attention to applying of digital factors into the industry
and then empowering industries via synergistic transformation in the whole industrial
chain (“Outline of the People’s Republic of China 14th Five-Year Plan for National
Economic and Social Development and Long-Range Objectives for 2035,” 2021).
Besides, according to China Academy of Information and Communications Technology
(2024b), the scale of China’s digital industrialization has increased to 10.9 trillion RMB
in the year 2023; simultaneously, the scale of China’s industrial digitalization has
ascended to 43.84 trillion yuan. These two statistical indicators indicate that digital
transformation has been thriving and is going to contribute more to the Chinese
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development as well as the progress of businesses from micro perspective. Along with
aforementioned researches, digital and technological development play roles in
removing obstacles of women promotion in work places. Therefore, it is valuable to
explore the relation between China’s digital transformation and gender diversity in
corporate governance.
1.2 Problem Statement
Digital transformation was firstly considered by J. R. Jensen (1981), which emphasized
on the relation between technology and data management in digitalized systems. In a
past decade, researches on the digital transformation mainly focused on three clusters,
the influence of digital transformation on businesses, the effect of technology on the
digital transformation, and the intervening mechanisms of institutions and society
(Kraus et al., 2021b). Concurrently, a series of papers shed lights on the positive impact
of the digital transformation on women employment.
In the context of digital economy, women are more conveniently accessible to new
opportunities than before (Anyanwu & Augustine, 2013). Online platform, digital
services, and digital commerce have entirely overturned the way of corporate
behaviours and consumer participation, which makes contribution to the female
employment. Traditionally, women tend to confront with various obstacles from both
domestic and societal when they have pursuits in labour market. However, the progress
and development of the digital economy tangibly facilitate the women employment,
especially in opportunity-driven entrepreneurship
(Chen et al., 2021) (i.e. the
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entrepreneurship that can lead to the economic growth in the forms of sustainability).
Besides, some papers examined the impact of female directors on the corporate
innovation. Griffin, Kai Li, and Ting Xu (2019) find that, globally, firms with less
gender disparities tend to be more innovative. Compared to their developed
counterparts, in underdeveloped countries, the gender diversity of multinational
corporations has lower positive impacts on the corporate innovation (Attah-Boakyea et
al., 2020). Furthermore, from the perspective of intra-organizational dimensions, more
female managers in management and directors in the board play a positive role in
developing inclusive innovation (Mar Fuentes-Fuentes et al., 2023).
On the other hand, some papers investigated the impact of technologies on the gender
gap or the gender diversity in the entrepreneurship. EroIul and Karatepe Kaya (2022)
argue that leveraging artificial intelligence in the board does not have negative impact
on gender parity in such a place. Additionally, the rapid development of information
and communications technology is beneficial to reducing unfair gender demography in
entrepreneurships, especially in rural areas as well as for women with disadvantageous
educational and working background in China (Sun, Ding, and Xie, 2024). Furthermore,
in China, technologies not only could promote the gender diversity in entrepreneurships,
but could enhance the rate of female employment (Cong et al., 2022).
However, scholar studies are featured by the paucity of attention to the digital
industrialization and industrial digital transformations in terms of firms. Most relevant
studies on the digital industrialization and industrial digitalization center on macro
scenario. For example, a group of paper explored whether or not the digital economy
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or the digital transformation positively affects female employment (Ahmad et al., 2024;
Y. Wu et al., 2024; Lu et al., 2023). They found that digital transformation and digital
economy significantly improve the women employment and promote the gender
diversity in workplaces even though digital divides exist in this process.
Theoretically, few studies have excavated theories for explaining the relation between
digital transformation and gender diversity in labour market formulated even though
they discussed and interfered causality between these two objects (Alves & Steiner,
2016; Im et al., 2003; Lu et al., 2023b). Besides, in China, based on modernizationneoclassical theory, digital economy and digital transformation stimulates the
development of economy and then fills the gender gap with contributions to less gender
biases in work places (Forsythe et al., 2000; Weiss et al., 1976; Card et al., 2021).
Additionally, based on inclusive innovation theory, Del Mar Fuentes‐Fuentes et al.
(2023d) found that gender diversity in corporate governance could contribute to the
application of innovation. Similarly, there is the paucity of papers on providing specific
theory for exploring the impact of digital transformation on the gender diversity in
corporate governance in China even though C. Chen et al. (2023) argued that digital
transformation is advantageous to eliminating information asymmetry and then to
improving the firm performance.
Therefore, this study is going to explore the internal operating mechanism between the
digital transformation and gender diversity in corporate governance China, aiming at
filling the theoretical gap around this and broadening boundaries of relevant researches.
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1.3 Research Question
The digital industrialization and industrial digitalization could promote the economic
growth in terms of the macro scope, especially in underdeveloped area. Simultaneously,
from the perspective of enterprise-level, the aforementioned two aspects of digital
transformation play a role in stimulating transformation of the production of products,
the allocation of products, the corporate internal resources allocation, and the corporate
efficiency. Moreover, the technological development benefits the elimination and
removal of impediments of human capital and resources when female employees pursue
positions (H. Chen et al., 2021b). However, how specifically do the digital
industrialization and the industrial digitalization influence the gender gap on the board?
Besides, how does corporate aspiration for their digital transformation (i.e. positive
digital transformation or passive digital transformation intention) affect the relationship
between the corporate digital transformation and the gender diversity in listed firms
from China?
1.4 Research Objectives
In order to comply with aforementioned points, this study is going to examine listed
companies in China in three aspects: (1) effects of the digital industrialization on the
gender parity at the management-level and the board-level; (2) effects of industrial
digitalization on the gender parity on the board; (3) moderating effects of corporate
intentions for adopting digital transformation on the relationship between their digital
transformation and gender diversity.
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1.5 Significance of Study
From the micro-scenario, there are several aspects that would benefit from this study.
First, previous relevant studies mostly tested the effect of gender diversity in firms
focusing on corporate innovative performance and centering on the effect of
technologies on gender gap in terms of entrepreneurships (Bouncken et al., 2020). This
paper intends to clarify that how digital transformation influences on corporate gender
parity from the point view of public companies of China, specifically form two lens,
digital industrialization and industrial digitalization. Therefore, the study would
provide different perspective of the relationship between technologies and gender
diversity in firms. Second, gender diversity has been a topic of corporate governance
and ESG relevant requirements. Moreover, gender diversity has been as a sustainable
indicator when companies aim at acquiring investors from the public and institutions.
Thus, this study would provide theoretical insights for these companies when they
consider strategies of enhancing their competitive advantages.
From the macro-scenario, former papers state that gender diversity in companies has
positive impact of corporate innovation and the innovation could stimulate domestic
economic growth, manifesting that this study would contribute to the development of
digital economy (i.e. one of the most important areas of China 14th Five-Year Plan for
National Economic and Social Development and Long-Range Objectives for 2035) in
China.
In conclusion, the study is designed to explore feasible theory to illustrate the impact
of digital transformation on the gender quality in corporate governance, broadening the
9
theoretical periphery in this researching area. In addition to that, offering more specific
scenario on how digital transformation affects gender parity in the corporate board is
favourable for providing researches and businesses with various practical situations in
such area.
CHAPTER2: THEORIES AND HYPOTHESIS DEVELOPMENT
2.1 Underpinning Theories
2.1.1 Resource Dependence Theory
There are a series of relevant theories that has been used to explain the digital
transformation and gender parity relevant researches. In this study, the Resource
Dependence Theory is going to be applied as the underpinning theory to formulate
hypotheses and construct the research framework.
In the resource dependence theory, a company is considered as an open system, existing
on external situations, (Pfeffer & Salancik,1978), which indicates that businesses are
advised to incorporate itself into social network. The theory states that it is necessary
to reckon the interorganizational relationship as the way of acquiring resources and
controlling resources supply (Ebers, 2015). Besides, corporations intend to manage
their pursuits of core resources via collaborating with external stakeholders (Ulrich &
Barney, 1984), that is, companies prefer operating with other organizations to
decreasing costs. Simultaneously, the other emphasis of the resource dependence theory
is coordination of the organizational boundaries. Specifically, the interorganizational
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boundaries are probably broadened, eroded, or transferred when companies aim at
acquiring indispensable resources, which manifests that preference or tendency of
stakeholders plays a role in affecting changes in corporate strategies (Carroll & Hannan,
2000; Håkansson & Snehota, 1995). In addition to that, under the background of Neoinstitutional theory, Strang and Sine (2022) argued that the form and operation of
interorganizational relationship is reshaped by legal pressure, institution of society, and
institutionalized behaviours. Moreover, Huxham and Vangen (2005) stated that
interorganizational relationship contributes to cooperative institutions tend to change
their strategic direction and the key point of their resource allocation.
Currently, the resource dependence theory is mainly adopted by following realms of
researches. Firstly, papers, focusing on the relation between supply chain management
and big data, applied this theory to test how the dependence of governmental and
institutional donation affect the form of NGO’s services, since big data is able to assist
in supply chain decision making (Prasad et al., 2016). Secondly, in the realm of
organizational economics, along with agency theory and transaction costs theory, the
resource theory could provide insights in comparatively assessing interorganizational
relationship (see Carroll & Hannan, 2000; Håkansson & Snehota, 1995). Furthermore,
from the perspective of the domain of strategic management, studies incline to leverage
this theory to illustrate changes and allocation of resources and information (Jarillo,
1994).
Concurrently, the relation between the digital transformation and gender diversity in
corporate governance not only is related to the resource allocation and changes in
11
corporate strategies, but also is relevant to realms of the organizational economics and
the strategic management. Consequently, the resource dependence theory is rational to
exposit the internal mechanism between this relation.
2.2 Resource Dependence Theory, Digital Transformation and Gender Diversity
As aforementioned, based on resource dependence theory, organizations have to adopt
external requirements if they desire core resources to keep competitive advantages.
Digital transformation is one of most crucial mission in the China 14th Five-Year Plan
for National Economic and Social Development and Long-Range Objectives for 2035
(2021), which is a key factor of China’s competitive advantages across the world. This
mission also promotes the digital transformation in terms of micro scenario, that is, at
the level of companies, when this companies have desire for acquiring competitive
advantages in their own sector. Therefore, on the ground of resource dependence theory,
corporations are apt to accelerate their digital transformation if they are interested in
obtaining crucial resources in the era of rapid technological development.
Currently, the whole world is accelerating their speed for achieving goals of 2030
agenda to the sustainability. Specifically, Goals5 of SDGs which requires gender
diversity in corporate governance also contributes to the digital transformation strategy
in companies. Hence, this factor plays a role in stimulating companies to consider more
equal conditions for gender parity in corporate governance in the process of digital
transformation, since, in line with the resource dependence theory, they have to comply
with political or economic policies for the purpose of the acquisition of resources to
12
develop.
In conclusion, the adoption of digital transformation in corporations positively impact
gender diversity in corporate governance.
Thus, the paper proposes the hypothesis 1:
Hypothesis1: In A-share listed companies, the adoption of the digital transformation
positively affects the gender diversity in corporate governance.
2.3 Human Capital, Digital Transformation and Gender Diversity
The participation of female labour force in the labour market is vital to the economic
development and growth.
Retrospectively, because of the influence of traditional culture, women employment
was hindered by traditional social labour division that the male was responsible for
providing money or other external resources for the family whereas the female was
responsible for taking care of households. Besides, according to human capital theory,
More investment on the staff trainings and education is advantageous for creating more
jobs. One empirical study concluded that it is indispensable to invest in female
techniques, knowledges, and capabilities when they want to have achievements and
promotion in their careers (Buta, 2015). Concurrently, digital transformation
contributes to the digital economy which stimulates the utilization digital technologies.
This strengthens human and social capital for individuals and then facilitates the
promotion of female staff. For example, the construction of digital infrastructure could
be convenient for women to access techniques, knowledges, and other resources,
13
removing barriers in front of the employment and promotion of women. Vazquez and
Winkler (2017) found that digital access positively affects the accumulation of human
capital for individuals, with reinforcing competitive capabilities of people.
Generally, because of traditional gender discrimination, employers prefer hiring the
male candidates rather than hire the female when these two different genders have
similar potential productivity, which encroaches the job opportunities for women
(Gaucher et al., 2011). However, as the application of digital technologies in the course
of the digital transformation, the perception of gender quality is disseminated and the
issue of information asymmetry is diminished, assisting in the elimination of gender
biases in the process of employment.
As a result, according to aforementioned discussion, the digital transformation would
increase investment in staff trainings in line with the resource dependence theory; and
then female would conveniently access the resources of online trainings, knowledges,
and other studying materials which could remove the obstacles relevant to human
capital on their way to leadership.
Hence, in the context of the China 14th Five-Year Plan for National Economic and
Social Development and Long-Range Objectives for 2035, being underpinned by the
resource dependence theory and along with human capital theory, the paper considers
the proportion of technologies used to train employees as the mediating variable. The
hypothesis 2 is formulated as following:
Hypothesis 2: In A-share listed firms, investment in technologies used for training their
staff mediates the relation between the digital transformation and the gender diversity
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in corporate governance.
2.4 First Mover Advantage, Digital Transformation and Gender Diversity
Generally, first mover advantage stem from three main resources, technological
leadership, assets’ preemption, and switching costs paid by buyer (Lieberman &
Montgomery, 1988).
Specifically, from the scenario of technological leadership, first- movers tends to obtain
advantage via technological sustainable leadership. This advantage mainly includes two
types, learning curve generated dominance and success in races of patent or R&D
(Lieberman & Montgomery, 1988). Learning curve could result in barriers to entry
when technologies are proprietary, leading to a few companies being able to acquire
profits (Spence,1981). However, innovation diffusion could impair predominance from
learning curve (Ghemawat and Spence,1985; Lieberman,1987c). Additionally, from the
perspective of success in race of patent and R&D, companies are characterized by being
in the lead position when they have more technological patents. Empirically, pioneering
companies would have more revenue and profits compared to their second-mover
counterparts (Robinson, 1988).
Consequently, under the assumption of first-mover advantage in the digital
transformation, the study argues that the time of adopting digital transformation in Ashare listed firms could moderate the effects of the digital transformation on the gender
diversity in the corporate governance. On the ground of the publishment of the China
14th Five-Year Plan for National Economic and Social Development and Long-Range
15
Objectives for 2035, the paper plans to deem the time of starting digital transformation
strategy in companies as the moderator.
Based on aforementioned studies and discussions, the paper posits the hypothesis 3:
Hypothesis 3: In A-share listed companies, the time of the time of starting digital
transformation strategy moderate the impact of the digital transformation on gender
diversity in corporate governance;
Hypothesis 3a: In A-share listed companies, the earlier beginning of the digital
transformation, the stronger causality between digital transformation and gender
diversity in corporate governance.
Hypothesis 3b: In A-share listed companies, the later beginning of the digital
transformation, the weaker causality between digital transformation and gender
diversity in corporate governance.
Figure 1 Theoretical Framework
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CHAPTER3: RESEARCH DESIGN
3.1 Sample and Data Collection
This paper is going to test aforementioned hypotheses based on data from CSMAR
database. Our data encompass digital transformation relevant data of A-share listed
companies from 2010 to 2023. Based on main areas of the digital industrialization and
the industrial digitalization, these data include following indicators, technology-driven,
organizational empowerment, environmental support, digital achievement, digital
application, and digital transformation index (in line with the China 14th Five-Year Plan
for National Economic and Social Development and Long-Range Objectives for 2035).
Besides, we simultaneously select indicators from financial statements of these
companies to measure gender diversity as well as the investment in technologies for
staff training.
3.2 Measurement of Variables
This paper intends to harness multilinear regression analysis to test the influence of the
digital industrialization on the gender diversity on the board and the influence of
industrial digitalization on the gender diversity on the board. Besides, grouping
regression model is going to be used to test the effect of moderator. Finally, Bootstrap
is going to be leveraged for testing the mediating effect of the time of the time of starting
digital transformation strategy.
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3.2.1 Dependent Variable
Inspired by Báez et al. (2018), in this paper, the gender diversity as the dependent
variable is going to be measured from three lens: the proportion on the female staff on
the board of directors and in management positions, the proportion of the female staff
with IT background on the board of directors, the percentage of maximum salaries paid
for the female staff over the maximum salaries paid for members with highest salarylevel on the board and in management positions.
3.2.2 Independent Variables
First, digital industrialization is going to be measured by such indicators, information
digital manufacturing, the industry of telecom, the software and information technology
service, using AI, big data, blockchain, cloud computing.
Second, industrial digitalization is going to be measured by such indicators, the
industrial internet, the intelligent manufacturing, internet of vehicles(loV), and the
platform economy.
3.2.3 Mediating Variables
After reviewing literatures, extent of adoption of digital industrialization relevant items
and industrial digitalization relevant items are going to be as mediating variables. They
would be measured from two aspects:
(1) the proportion of investment on AI, big data, blockchain, and the software and
information technology over the total investment in each year, and the proportion
18
of investment on the industrial internet, the industrial over the total investment in
each year.
(2) the proportion of items mentioned in (1) that are being applied into employee
training.
3.2.4 Control Variables
The size of companies and the age of directors are going to be considered as control
variables.
3.2.5 Moderating Variables
According to theoretical framework and hypotheses in Chpater2, the time of starting
adoption digital transformation tactic is going to be considered as the moderator in the
study.
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