Abstract:     Market power, as a critical factor influencing risk management and resource allocation, plays a pivotal role in shaping and executing strategies for digital transformation. Using the data from A-share listed companies between 2017 and 2021, this study applied the fixed effects and moderating effects models, grounded in theoretical analysis, to explore how market power affects enterprise digital transformation, and uncovered several key findings: (1) Market power significantly drives enterprise digital transformation and exhibits characteristics of marginal increasing returns; (2) The business environment plays a moderating role in the impact of market power on digital transformation; (3) The impact of market power on digital transformation exhibits heterogeneity, with a more pronounced promoting effect observed in non-state-owned enterprises, labor-intensive enterprises, and enterprises located in eastern regions; and (4) Market power fosters sustained growth in intangible investments related to digital technologies, indicating a dynamic cumulative effect. The paper will broaden the research horizon on market power and enterprise digital transformation, thus offering practical implications for promoting digital transformation and optimizing the business environment.

Key words:  market power, enterprise digital transformation, business environment, moderating effect