Does economic policy uncertainty exacerbate the gap between firms’ words and actions? Evidence from China’s digital transformation

This paper analyses the impact of economic policy uncertainty at the firm level on the inconsistency of words and actions in their digital transformation. Using new quantitative indicators of the gap as well as robust models, we find that firm economic policy uncertainty can exacerbate the gap between what firms say and do about digital transformation. In light of these findings, the paper concludes that there tends to be a certain amount of digital transformation hype among listed firms.