Whereas digital businesses can have an enormous market value, it remains an open question, whetherfirms, embarking on a digital transformation journey, can realize similar benefits. Thus, we rely on the signaling theory to study, whether strategic emphasis on digital transformation -i.e., the extent, to which a firm focuses on digital transformation in its strategyas well as firm size as an indicator of a large resource basis jointly influence market capitalization. To answer this question, we conducted a longitudinal panel data analysis of the largest German publicly listed companies from 2000 to 2017. Our results show, that strategic emphasis on digital transformation leads to a higher market capitalization for larger firms and to a lower market capitalization for smaller firms. Whereas larger firms should further disclose their strategic emphasis on digital transformation, smaller firms should consider sending additional signals to investors, demonstrating their ability to undergo digital transformation successfully.

Across industries, firms face the need to digitalize their service processes, i.e., transform the service delivery from a physical into a digital form or enhance it through digital technologies. Therefore, one important challenge can arise due to the inseparability of service processes, which describes the necessity for a customer to consume a service the moment which a service provider produces it. Since existing research has failed to examine inseparability as a predictor of service digitalization, this study aims to explore whether inseparability hinders the digitalization of service processes and whether internal support in form of innovation culture and external support from third parties can help to mitigate the influence of inseparability. Data from an online survey of 204 German service employees and managers confirm our hypotheses. These results demonstrate to practitioners that although it may be more difficult to digitalize service processes due to their inseparability, firms may rely on internal and external support for innovation to overcome this challenge.

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