Seeking gains or avoiding losses? A study on the cohort effects of digital transformation among Chinese manufacturing enterprises

In the digital economy era, digital transformation is the dominant choice for manufacturing companies. As peers in the industry face similar challenges, they tend to learn from and pay attention to the digital transformation behaviour of their peers to make better decisions that help 'seek gains and avoid losses'. This study empirically examines the existence and trigger mechanisms of the cohort effect of digital transformation based on panel data of manufacturing companies listed in Shanghai and Shenzhen A-shares from 2012-2021. The results show a significant cohort effect of digital transformation in manufacturing companies. From the perspective of 'avoid losses', companies are more willing to learn and imitate the digital transformation decisions of industry peers. From the perspective of 'seeking gains', the intensification of market competition will lead to the weakening of the competitive advantage of companies. When some companies re-establish their advantages through digital transformation, others adopt homogenisation strategies to match their behaviour, which can keep their competitiveness not lagging behind the industry average. Further research finds that the 'avoid losses' trigger of the cohort effect is stronger than the 'seek gains' trigger. Finally, an incentive mechanism for the digital transformation of China's manufacturing industry is proposed.