Digital transformation of leading firms and Chinese cities’ participation in GVCs: the moderating role of institutional legitimacy and social legitimacy

While existing studies have primarily examined the firm-level drivers and outcomes of digital transformation, little attention has been paid to its regional implications for participation in global value chains (GVCs). Drawing on a large, multi-source matched dataset, this study investigates the influential mechanisms of digital transformation on local participation in GVCs across different regional contexts. It finds that digital transformation has exerted a significantly positive influence on local participation in GVCs, which is moderated by both institutional legitimacy and social legitimacy. This paper emphasises the importance of industrial heterogeneity and legitimacy in understanding digital transformation.