Does digital transformation matter for corporate risk-taking?

Tian, Guoqiang; Li, Bo; Cheng, Ya

doi:10.1016/j.frl.2022.103107

Cited by 124 publications

(45 citation statements)

References 18 publications

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“…Zeng and Lei (2021) reveal the influence of corporate digital transformation on TFP. Tian et al (2022) find that digital transformation has a significant positive effect on corporate risk-taking. But in the research on the consequences of digital transformation, there is no literature on the financing cost.…”

Section: Digital Transformationmentioning

confidence: 83%

“…Researchers show that digital transformation help enterprises to optimize production processes (Earley, 2014), reshape organizational business form (Li, 2020;Kretschmer & Khashabi, 2020) and change value creation mode (Berman, 2012;Rachinger et al, 2018). Now more and more scholars begin to study the impact of digital transformation of enterprises empirically, such as enterprise performance (Peng & Tao, 2022;Chen & Hao, 2022), risk-taking (Tian et al, 2022), the total factor productivity (Zeng & Lei, 2021), corporate innovation (Wen et al, 2022), merge and acquisition, corporate social responsibility (Meng et al, 2022), international strategy (Gao et al, 2022), etc.…”

Section: Digital Transformationmentioning

confidence: 99%

“…Enterprises will be more proactive in their information disclosure and disclose more extensive content. Under the condition of better processing and output of effective information, enterprises' digital transformation can "push" information to market subjects; external creditors of enterprises can undoubtedly master more sufficient and comprehensive information than before (Zeng & Lei, 2021;Tian et al, 2022). Second, with the help of cloud computing, big data and other latest scientific and technological means, enterprises can quickly connect with creditors directly after digital transformation.…”

Section: Hypothesis Developmentmentioning

confidence: 99%

“…Instrumental variable method. In order to enhance the robustness of the conclusion of this paper, referring to Tian et al (2022), this paper uses the general public finance science and technology expenditure and the Internet penetration rate of each province as the instrumental variable of digital transformation, and uses the two-stage least square method (2SLS) to endogenously process the model. The regression results are shown in Table 7.…”

Section: Robustness Testmentioning

confidence: 99%

“…On the one hand, digital transformation increases the technical level of things and alleviates firms' information asymmetry (Zeng & Lei, 2021;Tian et al, 2022). According to the signaling theory (Spence, 2002;Bergh et al, 2014), when enterprises effectively promote their digital transformation, they can use two waysincrease effective information disclosure, broaden information transmission channels to reduce the cost of information search -to reduce the degree of information asymmetry between creditors and enterprises, thus reducing debt financing costs; On the other hand, digital transformation of enterprises can weaken the discretion of management over daily business activities through a flatter organizational structure and form a real-time monitoring mechanism through business digitalization, enhancing the close attention and supervision of external stakeholders of all parties (Cenamor et al, 2019;Cennamo & Santalo, 2019;Tian et al, 2022;Meng et al, 2022). It will reduce opportunistic behaviors of management and major shareholders, reduce agency conflicts, and reduce debt financing costs finally.…”

Section: Introductionmentioning

confidence: 99%

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Enterprise digital transformation and debt financing cost in China?s A-share listed companies

Sun

Zhang

Vochоzka

et al. 2022

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Research background: The rapid development of digital economy has set off a new wave of enterprise reform. Developing the digital economy is not only an urgent requirement of the current situation, but also an important way to meet the people's better life. Purpose of the article: This paper attempts to reveal the important role of the development of digital technology on the debt financing cost of micro enterprises, and provide micro evidence for the integration of digital economy and real economy. At the same time, this paper wants to provide relevant guidance for formulating digital related policies and reducing the financing cost of the real economy. Methods: Taking China?s A-share listed companies from 2007 to 2020 as a sample, this paper empirically tests the impact of enterprise digital transformation on debt financing cost and its mechanism. In the robustness test, this paper uses the measures of changing independent variables and dependent variables, instrumental variable method and quantile regression method. In the mechanism test, this paper uses the intermediary effect model. In the further study, this paper uses the method of group regression. Findings & value added: The study finds that the digital transformation of enterprises significantly reduces the cost of debt financing. Mechanism tests show that the role of enterprise digital transformation in reducing debt financing costs is mainly realized by reducing information asymmetry and alleviating agency problems. Further tests show that the relationship between enterprise digital transformation and debt financing cost is affected by the degree of market competition, whether it is a high-tech enterprise and audit quality. When the degree of market competition is high, the enterprise is a high-tech one, or it is audited by the four major international accounting firms, the effect of enterprise digital transformation on the reduction of debt financing cost is more significant. The method used in this paper is also applicable to the study of other economic management problems. This paper proves a positive significance of digital transformation, which is conducive to promoting the digital transformation of enterprises. Especially for those enterprises in non-high-tech industries, they should speed up the pace. At the same time, this paper has a certain guiding role for the introduction and implementation of policies to encourage digital transformation.

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Section: Digital Transformationmentioning

confidence: 83%

Section: Digital Transformationmentioning

confidence: 99%

Section: Hypothesis Developmentmentioning

confidence: 99%

Section: Robustness Testmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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Enterprise digital transformation and debt financing cost in China?s A-share listed companies

Sun

Zhang

Vochоzka

et al. 2022

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Are digital trends driving corporate environmental, social, and governance practices? Evidence from China

Xiao,

Xu,

2024

Bus Strat Env

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This paper aims to explore whether the trend of digital transformation is driving companies to engage in environmental, social, and governance (ESG) practices. The impact of strategic transformation on firms is all‐encompassing, making it difficult to capture the mechanisms of impact on corporate ESG practices. To this end, we construct a new theoretical framework that combines slack resources and stakeholder theory. This framework attributes the heterogeneity of ESG practices to differences in the ability and willingness of companies. Using data from Chinese listed companies, we find that the digital transformation is improving ESG performance. The mechanism is that digital transformation increases the availability of long‐term slack resources and strengthens the connection with stakeholders. However, there is insufficient evidence that digital transformation contributes to greater transparency in corporate disclosure. We also find that this effect is larger for firms with less risk‐responsiveness and firms with international connections, but smaller for firms with political connections. Our findings affirm the advantages of contemporary trends in corporate digital transformation for ESG practices and offer a new theoretical framework to investigate the factors influencing ESG practices.

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Digital transformation, external financing, and enterprise resource allocation efficiency

Liu,

2024

Manage Decis Econ

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In a highly informative society, digital transformation has become a new driving force to enhance enterprise competitiveness and promote high‐quality economic development. This paper examines the impact of digital transformation on firms' resource allocation efficiency using a sample of Chinese A‐share listed companies in the manufacturing industry from 2007 to 2019. The research findings are as follows: The digital transformation has significantly improved enterprise resource allocation efficiency. Mechanisms suggest that digital transformation enhances resource allocation efficiency by attracting external financing, both equity and debt financing. Furthermore, the contribution of digital transformation to enterprise resource allocation efficiency is more pronounced in the eastern region, high‐tech industries, and non‐state‐owned enterprises. This paper provides new evidence for exploring effective paths to improve resource allocation efficiency from the digital transformation perspective. It is significant for accelerating enterprise digital transformation and achieving cost reduction and efficiency enhancement.

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Does digital transformation matter for corporate risk-taking?

Cited by 124 publications

References 18 publications

Enterprise digital transformation and debt financing cost in China?s A-share listed companies

Enterprise digital transformation and debt financing cost in China?s A-share listed companies

Are digital trends driving corporate environmental, social, and governance practices? Evidence from China

Digital transformation, external financing, and enterprise resource allocation efficiency

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