[Retracted] Enterprise Digital Transformation and Stock Price Crash Risk: Evidences from China

Abstract

With unstoppable rise of digital economy globally, digital transformation has become an inevitable choice for enterprises to survive and develop; both the public and the government are paying increasing attention to digital transformation. At the same time, the Chinese government takes more serious attitude towards systemic financial risks, emphasizing the importance of controlling systemic risks such as abnormal stock price in many public occasions. In this context, enterprise digital transformation and stock price crash risk have gained unprecedented attention. It is of great value for both industry and the government to analyze the influence and mechanism of enterprise digital transformation (EDT) on stock price crash risks. This study measures the degree/level of EDT of Chinese A-share publicly owned enterprises through document study and crawler technology, examining the influence and mechanism of digital transformation on companies’ stock price crash risk. Conclusions of this paper may provide a theoretical and empirical basis for understanding digital transformation's consequences in capital market and provide a reference for the government and regulatory authorities to formulate support and disclosure policies for digital transformation.

Optimal Allocation of Enterprise Resources Based on the Intelligent Algorithm from the Perspective of Multidimensional Dynamic Innovation

“…As a whole, the national strategy seeks to drive production techniques through digital transformation and to empower the transformation and upgrading of traditional industries. For small and medium-sized businesses, digital transformation is no longer an option, and it is a requirement for survival and long-term growth [1][2][3][4][5][6][7].…”

CEO discretion and enterprise digital transformation

“…Enterprise Digital Transformation (EDT). For example, Song uses the ‘0 or 1’ dummy variable representing ‘whether or not the enterprise is undergoing digital transformation’ to measure the digital transformation of enterprises [ 53 ]. However, this technical approach is not effective in showing the ‘intensity’ of enterprise digital transformation and may cause misestimations of the extent of enterprise digital transformation.…”

Can digital transformation reduce corporate stock price crashes?

“…Digital Transformation (DT). In this paper, we use the analysis method of this paper to measure the level of digital transformation of enterprises [ 21 , 22 , 41 ]. Firstly, We organize the annual reports of all A-share listed companies on the Shanghai Stock Exchange and Shenzhen Stock Exchange through the Python crawler function, extract all the text content through the Java PDFbox library, and use it as a data pool to prepare for the subsequent feature word screening.…”

“…However, much past research has concentrated on individual corporate conduct and external regulation, with little attention paid to the impact of emerging technologies such as artificial intelligence, cloud computing, and digital transformation in stock market collapses. A few related papers only briefly talk about how digital transformation might cause stock prices to crash [ 21 , 22 ]. They say that information and internal control are two possible mechanisms [ 23 ], they do not detail about the evidence and the channels of action between digital transformation and the risk of stock price crashes.…”