An empirical assessment of the influence of digital transformation on sports corporate sustainability

The trend of digital transformation is essential for the sustainable development of sports enterprises within the emerging digital economy. However, there’s a lack of empirical studies on how digital transformation impacts the sustainability of sports organizations at the micro level. This study uses a sustainable growth dynamic model to analyze 48 sports corporations listed in China from 2012 to 2021. It explores the relationship between digital transformation and sustainability through various models. A key contribution is the development of comprehensive indicators for measuring corporate digital transformation, providing insights into sustainable development in sports organizations. The study reveals that digital transformation significantly contributes to the long-term sustainability of sports enterprises, particularly in the eastern region of China. However, the exact mechanisms, such as the mediating effects of technological innovation and total factor productivity (TFP), require further validation. Additionally, the study identifies threshold effects based on financing restrictions, operational costs, and efficiency, shedding light on the complex relationship between digital transformation and sports corporate sustainability .

The digital economy’s role as a stabilizing force and an engine of growth has gained attention due to recent advancements in science, technology, and industry. This trend offers opportunities for nations but also presents challenges for businesses. China is embracing a new era of ‘digitalization’ due to the rapid growth of its digital economy, which was valued at 45.5 trillion yuan in 2021, about 39.8% of the nation’s GDP. This push supports China’s pursuit of high-quality economic growth and encourages sustainable development in enterprises. During the Beijing Winter Olympics, digital technologies like smart broadcasting and online retailing were extensively used, highlighting their importance in the sports industry. The integration of digital technology received praise from the International Olympic Committee for setting new technical standards and accelerating digital transformation in sports. This digital innovation in the sports industry aligns with China’s goals for its sports industry to reach over 5 trillion yuan in development by 2025 and become a pillar industry by 2035. Implementing digital transformation in sports companies aims to upgrade traditional business models, enhance efficiency, and foster innovation. This study addresses a gap in existing research by analyzing the connection between digital transformation and the long-term growth of sports firms, focusing on firm-level sustainability.

Corporate sustainability involves achieving long-term economic well-being while safeguarding the environment and enhancing social welfare. This balance among economic, environmental, and social factors is crucial. Economic sustainability requires companies to innovate and adapt to market changes for long-term profitability. Environmental sustainability entails implementing measures to protect natural resources and meet environmental regulations. Social sustainability involves focusing on social responsibility and building good relationships with stakeholders.

Factors influencing corporate sustainability include green innovation and organizational management. Green innovations, like products and processes, help companies establish a positive image, reduce resource consumption, and meet environmental goals. Environmental awareness in management is essential for sustainable development. Executives’ environmental cognitions and external pressures, like government regulations, influence green innovation positively.

Digital transformation refers to the integration of digital technology into all aspects of a business, leading to economic transformation. It enhances internal efficiency and external perceptions, particularly in areas like digital finance and the internet. Digital transformation reduces information asymmetry, improves market outlooks, and enhances business performance. It also facilitates rapid data collection and analysis, identifying business opportunities and threats.

In the sports industry, digital transformation is crucial for improving systemic structures, marketing systems, and economic benefits. Theoretical studies highlight how digital transformation reshapes industries and improves management efficiency. Practical investigations show that it enhances productivity and business performance through cost reduction and optimization.

Scholars have investigated various aspects influencing corporate sustainability, including green intellectual capital, corporate governance, and external uncertainties like resource-based cities and circular economy practices. Some research focuses on the impact of digital transformation on sustainability, showing it positively affects corporate sustainability by reducing costs and improving innovation.

However, there’s limited research on how digital transformation affects sustainability in sports enterprises. This study aims to fill this gap by assessing the impact of digital transformation on the sustainability of sports companies. It innovatively uses text mining to evaluate digital transformation levels and analyzes the relationship between digital transformation and sustainability. The study’s framework includes benchmark analysis, endogeneity test, heterogeneity test, and mechanism analysis, aiming to unveil the mechanism underlying this relationship and provide insights into fostering enterprise sustainability through digital transformation.

Digital transformation has a significant impact on corporate sustainability, enabling companies to enhance competitiveness and expand globally. By adopting digital strategies, corporations aim for high performance, efficiency, innovation, and reduced costs, thus surpassing traditional growth models. Digital technologies allow companies to continuously evolve their business logic and value proposition, accessing greater growth opportunities. Internally, digital tools help in managing unstructured data, enhancing resource allocation, and increasing production efficiency. The integration of digital technologies streamlines operations and organizational processes, leading to more agile structures.

Externally, the digital environment influences long-term sustainable growth. Advanced data systems alleviate information asymmetry, enabling personalized services and better decision-making. The digital economy, supported by government initiatives, provides a favorable environment for enterprise growth, offering new market spaces. Digital transformation is crucial for sustainable growth, enabling companies to adapt to market changes and technological advancements.

Technological innovation plays a vital role in sustainable development. Digital transformation introduces new tools and platforms, facilitating product, organizational, and business model innovation. Technologies like digital simulation enhance R&D processes, improving innovation efficiency. This synergy between digital transformation and innovation promotes sustainable competitive capabilities and long-term advantages.

Financing constraints pose challenges to sustainable development during digital transformation. While initial investments are substantial, efficiency gains and innovation capabilities help overcome these limitations. The relationship between digital transformation and sustainability is affected by nonlinear spillover effects. Operational expenses and efficiency impact this relationship, with excessive cost-cutting potentially harming sustainable development.

Operational efficiency, a cornerstone of digital transformation, enhances enterprise quality and effectiveness. Digital systems optimize internal processes, improve marketing efficiency, and enhance supply chain management. Efficient supply chain systems optimize resource use, reduce waste, and enhance environmental sustainability. Overall, digital transformation improves operational efficiency, profitability, and competitive advantages, driving sustainable development.

This study examines the impact of digital transformation on the sustainable development of sports enterprises using 48 companies listed on the A-share and New Third Board from 2012 to 2021. It finds that digital transformation significantly contributes to sustainable development, even after rigorous tests. Regional and industry differences affect the benefits of digital transformation, with Eastern China and high-tech firms gaining more. While digital transformation promotes technological innovation, its impact on overall productivity and sustainability is less significant. Financing constraints and operational costs show threshold effects on the relationship between digital transformation and sustainability, with operational efficiency having a positive impact.

Policy recommendations include targeted support for digital transformation, financial assistance, and the creation of digital platforms. Enterprises are advised to tailor their digital transformation strategies to their specific needs and circumstances, avoiding blind imitation. Management should recognize the benefits of digital transformation, encouraging its adoption, and improving operational efficiency and innovation. Limitations of the study include the need for a more comprehensive evaluation system incorporating social and environmental indicators, exploring various impact mechanisms, analyzing heterogeneity in multiple dimensions, and expanding the sample size to include more types of enterprises and regions.


Source:

Wang H, Lu L, Fu Y, Li Q (2024) An empirical assessment of the influence of digital transformation on sports corporate sustainability. PLoS ONE 19(4): e0297659. https://doi.org/10.1371/journal.pone.0297659