To read this content please select one of the options below:

The effect of digital transformation on firm performance: evidence from Swedish listed companies

Maha Khemakhem Jardak (Department of Accounting, IHEC-Sfax, University of Sfax, Sfax, Tunisia)
Salah Ben Hamad (FSEG of Tunis, Tunis, Tunisia)

Journal of Risk Finance

ISSN: 1526-5943

Article publication date: 24 May 2022

Issue publication date: 25 July 2022




The objective of this research is to examine empirically the effects of digital maturity (DM) on the firm's financial performance as measured by return on assets (ROA), return on equity (ROE) and Tobin's Q.


The authors use a panel data sample of 92 observations collected from 23 listed firms on Sweden's stock exchange over four years, 2015–2018. The authors hand collect DM from the digital leader's reports and collect financial data from DataStream. Using both static and dynamic panel (generalized method of moments (GMM) estimation) regression models to perform endogeneity problem, the authors explore the impact of the DM index on ROA, ROE and Q of Tobin.


The results show that DM has a negative effect on ROA and ROE but a positive effect on Q of Tobin. This negative relationship can be explained, by the fact that information technology (IT) investment and the DM could take years to be materialized and to be captured by performance indicators. Company investment in IT will increase and basically the ROA will be negatively affected because the higher value of IT assets is not amortized. Nevertheless, in the long term, company can maximize its performance. The positive effect on Q of Tobin captures the long-run effect of digital transformation.

Research limitations/implications

This research can be helpful for firms in their process of digital transformation to succeed with the change, create value and to understand the challenges they have to face. In the short term, firms undertaking digital transformation will face some financial difficulties which affect negatively their ROA and ROE, but in the long term they can maximize their performance (captured by Tobin’s Q) and improve their market value.


In previous research, the impact of digital transformation on performance has been measured in terms of revenue growth, profit margins and in terms of earnings before interest and taxes (EBIT). Even if the authors have sufficient evidence of the positive effect of digital transformation on organizational performance, there is no support of the positive effect on financial performance. So, the authors try to fill this gap. This research has also the merit of examining this relationship empirically through a dynamic panel data estimation two-step system GMM, while the majority of previous studies are qualitative in nature based on interviews and questionnaires or simple correlations.



This paper forms part of a special section “Technological disruption, Innovation and Global wellbeing Part II”, guest edited by Faten Ben Bouheni and Duc Khuong Nguyen.


Jardak, M.K. and Ben Hamad, S. (2022), "The effect of digital transformation on firm performance: evidence from Swedish listed companies", Journal of Risk Finance, Vol. 23 No. 4, pp. 329-348.



Emerald Publishing Limited

Copyright © 2022, Emerald Publishing Limited

Related articles