Does digital transformation matter for corporate risk-taking?

Guangning Tian, Bo Li and Yue Cheng

Finance Research Letters, 2022, vol. 49, issue C

Abstract: This paper investigates how the digital transformation of firms affects their risk-taking in China. By using a panel of Chinese listed companies from 2007 to 2020, we find that digital transformation has a significant positive effect on corporate risk-taking. Furthermore, we show that digital transformation promotes corporate risk-taking by improving firms’ operating flexibility and financing availability. Besides, the effect is more pronounced for non-state-owned firms and the firms operating in developed regions. Our findings provide insights on how digital transformation shapes corporate policies and supplement the existing literature in the determinants of corporate risk-taking.

Keywords: Digital transformation; Corporate risk-taking; Operating flexibility; Financing availability (search for similar items in EconPapers)
JEL-codes: G31 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (84)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:49:y:2022:i:c:s1544612322003312

DOI: 10.1016/j.frl.2022.103107

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