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Does the digital transformation of enterprises affect stock price crash risk?

Author

Listed:
  • Wu, Keping
  • Fu, Yumei
  • Kong, Dongmin

Abstract

This study investigates the effect of enterprise digital transformation on stock price crash risk using a sample of Chinese listed companies during the period 2007–2020. We find that the digital transformation of enterprises can significantly reduce stock price crash risk, and shows a certain structural heterogeneity. The above conclusions still hold after a series of robustness tests. Further, we identify that the relationship is more pronounced in high-tech enterprises and economically developed regions. Overall, the paper can provide empirical evidence for understanding how to reduce stock price crash risk in the capital market, and provide relevant implications for better driving the digital transformation of enterprises.

Suggested Citation

  • Wu, Keping & Fu, Yumei & Kong, Dongmin, 2022. "Does the digital transformation of enterprises affect stock price crash risk?," Finance Research Letters, Elsevier, vol. 48(C).
    • Handle: RePEc:eee:finlet:v:48:y:2022:i:c:s1544612322001702
    DOI: 10.1016/j.frl.2022.102888
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    References listed on IDEAS

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    More about this item

    Keywords

    Digital transformation; Information asymmetry; Stock price crash risk;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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