Business Environment and Enterprise Digital Transformation

•Business environment and enterprise digital transformation are positive related.•Three mechanisms are further tested.•The positive relation varies from series of heterogeneous factors. Digital transformation has become imperative for firms to survive in highly competitive societies. This study investigates the relationship between the business environment and enterprise digital transformation. The results show a significant positive relationship between the two. Further channel analysis indicates that attracting professional leadership of top managers, enhancing investment in digital technology, and increasing government subsidies related to digitalization provided by a better business environment are three possible channels that facilitate digital transformation. Overall, our study provides new insights on the determinants of digital transformation and offers supplementary evidence for companies to facilitate their pace of digital transformation.