JTAER, Vol. 21, Pages 21: The Past Shapes the Present: Competitive Experience and Digital Orientation

Journal of Theoretical and Applied Electronic Commerce Research doi: 10.3390/jtaer21010021

Authors:
Yanyan Ma
Xiaohong Wang
Yixuan Kang
Linlin Liu

As a crucial endogenous resource of firms, history has increasingly been recognized for its role in shaping strategies. However, little is known about how historical competitive experience affects digital orientation (DO), a vital strategic foundation that enables firms to capture value from digital transformation. This study addresses this gap by investigating the impact of competitive experience on firms’ DO and the factors shaping this relationship. Using a panel dataset of 4281 Chinese A-share listed firms from 2012 to 2023, we measure DO through MD&A-based text analysis and test our hypotheses with a two-way fixed-effects model. The results reveal an inverted U-shaped relationship between competitive experience and DO. This indicates that moderate competitive experience stimulates DO, while excessive competitive experience can induce rigidity and constrain DO. Interestingly, market turbulence decreases the positive and increases the negative effect of competitive experience on DO, whereas market competition exerts the opposite moderating effect. Further analysis shows that this positive effect is enhanced within a higher-quality innovation environment. Our findings highlight the importance of history in shaping firms’ digital strategic posture in an emerging market. By treating competitive experience as a strategic resource, managers can transform their competitive legacy into a powerful engine for DO, especially under favorable environments.

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Yanyan Ma www.mdpi.com