Corporate digital innovation and stock price crash risk

Yan Liu, Xuekun Suo, Xiuhong Du, Hengqin Wu and Han Lin

Finance Research Letters, 2024, vol. 66, issue C

Abstract: Through the lens of bad news hoarding theory, this study empirically examines the influence of corporate digital innovation on stock price crash risk based upon the listed Chinese manufacturing firms from 2010 to 2022. The results show that corporate digital innovation could significantly mitigate stock price crash risk with structural heterogeneity (i.e. industry, ownership, and region). The observations still hold after addressing endogeneity issue and robustness tests. The findings contribute to a deeper understanding of the role of innovation strategy enabled by digital technology in capital markets and enlighten new insights into reducing crash risks.

Keywords: Digital innovation; Stock price crash risk; Bad news hoarding; Capital markets; Risk management (search for similar items in EconPapers)
JEL-codes: G12 G32 O16 O33 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324007207

DOI: 10.1016/j.frl.2024.105690

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