ARTICLE | Technology in Society | Vol.74, 2023

Abstract

The integration of digital technologies and processes presents a multifaceted and complex challenge for family firms, as they must navigate new technologies while maintaining their unique familial attribute. Moreover, the issue of intergenerational inheritance adds an additional layer of complexity, as succession must be effectively executed to ensure the continued success and survival of the family firm in the digital age. Together, these challenges pose a significant threat to the sustainability and competitiveness of family firms. To gain a deeper understanding of how these challenges can be effectively addressed, the study utilizes data from the 2016 Chinese Private Enterprises Survey to identify the factors influencing family firms' digital transformation and the role of entrepreneurs' characteristics in this process. From the perspective of intergenerational inheritance, the study finds that both the willingness of entrepreneurs to hand over power and the willingness of their children to take over firm power have a moderating effect on the relationships between entrepreneurs' characteristics and firms’ digital transformations. This study also verifies the heterogeneous effects from the type of business digitalization, location of the firm, and educational level of the children.