The dark side of corporate digital transformation: Evidence from excess perk consumption of executives

Jinghua Wu, Yanping Liang and Wei Liu

Finance Research Letters, 2024, vol. 61, issue C

Abstract: We investigate the effect of corporate digital transformation on the excess perk consumption of executives (henceforth, excess perk consumption) using a sample of Chinese listed companies from 2010 to 2021. The results show that corporate digital transformation increases excess perk consumption by aggravating information asymmetry between insiders and outsiders, and by increasing business complexity. Cross-sectional analyses show that the effect of corporate digital transformation on excess perk consumption is stronger in firms with higher managerial power, state-owned enterprises, and high-tech firms. Our study provides new insights into the digital transformation paradox and has policy implications for regulators and enterprises.

Keywords: Corporate digital transformation; Excess perk consumption of executives; Information asymmetry; Business complexity; Digital transformation paradox (search for similar items in EconPapers)
JEL-codes: D22 G32 O14 (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:61:y:2024:i:c:s1544612324000631

DOI: 10.1016/j.frl.2024.105033

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