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How digital technology improves the high-quality development of enterprises and capital markets: A liquidity perspective

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  • Liu, Guangqiang
  • Liu, Boyang

Abstract

This paper finds that the digitalization has a positive impact on stock liquidity, especially those lack analyst follow-up or low online media attention. We use “Made in China 2025” as an exogenous shock to conduct difference-in-differences estimation to improve causality. We discuss a possible mechanism based on classical information asymmetry theory. Our results are robust to a battery of tests based on different specifications and alternative measures. Overall, this research evaluates the significance of digital transformation for enterprises and has implications for enhancing capital market liquidity.

Suggested Citation

  • Liu, Guangqiang & Liu, Boyang, 2023. "How digital technology improves the high-quality development of enterprises and capital markets: A liquidity perspective," Finance Research Letters, Elsevier, vol. 53(C).
    • Handle: RePEc:eee:finlet:v:53:y:2023:i:c:s1544612323000570
    DOI: 10.1016/j.frl.2023.103683
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    Cited by:

    1. Huang, Yuhong & Gao, Yajia, 2023. "Labor protection and the digital transformation of enterprises: Empirical evidence from China's social insurance law," Finance Research Letters, Elsevier, vol. 57(C).

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