Does the Digital Transformation of Enterprises Affect Stock Price Crash Risk?

24 Pages Posted: 18 Jan 2023

See all articles by Keping Wu

Keping Wu

School of Business & Administration Chaohu university

Yumei Fu

Shantou University

Dongmin Kong

School of Economics, Huazhong University of Science and Technology

Date Written: August 1, 2022

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 and Fu, Yumei and Kong, Dongmin, Does the Digital Transformation of Enterprises Affect Stock Price Crash Risk? (August 1, 2022). Finance Research Letters, Vol. 48, 2022, Available at SSRN: https://ssrn.com/abstract=4324289

Keping Wu (Contact Author)

School of Business & Administration Chaohu university ( email )

Chaohu Economic Development Zone
Hefei, Anhui 238000
China

Yumei Fu

Shantou University

Dongmin Kong

School of Economics, Huazhong University of Science and Technology ( email )

Bldg. of Econ. School, Louyu Rd. 1037#
HUST, Hongshan Dist.
Wuhan, Hubei 430074
China

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