How digital transformation can affect corporate technology innovation: The role of income gap

Technological innovations are vital for improving business competitiveness in the digital economy age. This study examines the relationship between digital transition and technological innovation behavior of Chinese firms from an income distribution perspective from 2011 to 2022. This empirical study finds that digital transformation effectively promotes corporate technology innovation by optimizing income distribution. Furthermore, while digital transformation increases external pay income, it widens internal income gap among executives. Moreover, it reduces the normal income gap, stimulating corporate technology innovation by boosting employees' spirit.