Does digital transformation restrain corporate financialization? Evidence from China

Ziqi Zhang, Zhi Su and Fang Tong

Finance Research Letters, 2023, vol. 56, issue C

Abstract: We investigate the effect of digital transformation on corporate financialization using a sample of Chinese listed firms from 2012-2021. We find that digital transformation exerts a negative impact on corporate financialization by decreasing financial investments while increasing real investments. More innovative activities and less operational uncertainty are two plausible channels that enable digital transformation to redeploy a greater number of resources from financial assets to real investments. We show that the effect of digital transformation on financialization is more prominent in companies with greater internal investment efficiency and external marketization levels. Our paper provides new insights on the effect of digital transformation on corporate financialization.

Keywords: Digital transformation; Corporate financialization; Real investment (search for similar items in EconPapers)
JEL-codes: D22 G32 O14 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:56:y:2023:i:c:s154461232300524x

DOI: 10.1016/j.frl.2023.104152

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