Tilburg School of Economics and Management (TiSEM), Tilburg U., Netherlands
In this study, we explore the factors that drive the decoupling behavior of firms, using digitalization as a context. We posit that digital decoupling is shaped by a firm’s position within its market. Drawing on neo-institutional theory and the status literature, we propose that firms with middle status are most likely to engage in decoupling behavior, emphasizing digital reporting to align with stakeholders, while missing on substantive digital actions. We then examine how institutional and industry factors affect might influence the choice for decoupling among firms with different status. Our analysis uses data from Chinese listed companies between 2011 and 2021, with results generally supporting our hypotheses.