Does digital transformation affect corporate mergers and acquisitions? From the perspective of information asymmetry

Xinhe Zhang, Shujing Yue, Jiayi Tao and Xiaobing Lai

Economic Analysis and Policy, 2025, vol. 86, issue C, 764-778

Abstract: This paper explores the impact of digital transformation on corporate M&As. The findings indicate that digital transformation significantly promotes corporate M&A behavior, as well as the volume and magnitude of M&A transactions. Mitigating information asymmetry between acquirers and target firms is the primary channel through which digital transformation exerts its effects. Further analysis reveals that the positive impact of digital transformation is more pronounced in non-high-tech firms and those lacking political connections. In addition, the regional internet development level negatively moderates the relationship between digital transformation and corporate M&As. This study provides a novel perspective for understanding the impact of digital transformation on corporate M&As, enriching the research on the micro-drivers of M&A activities.

Keywords: Digital transformation; Mergers and acquisitions; Information asymmetry (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecanpo:v:86:y:2025:i:c:p:764-778

DOI: 10.1016/j.eap.2025.03.049

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