Opportunistic behaviour behind corporate digitalization disclosure: The moderating role of economic policy uncertainty

Kaolei Guan, Mengting Fu and Haining Zhu

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

Abstract: We identify the opportunistic behavior behind corporate digitalization disclosure (CDD) from an insider trading perspective and the moderating effect of economic policy uncertainty (EPU) on this relationship using a sample of listed enterprises in China from 2009 to 2022. We find that insider opportunistic trading behavior significantly explains the phenomenon of more CDD in the prior period management discussion and analysis (MD&A) of the annual report, driven by CDD can elevate investor sentiment. The moderating model shows that EPU worsens the observed phenomenon. Overall, our findings suggest insider may exploit digital trends for self-interest in emerging capital markets.

Keywords: Corporate digitalization disclosure; Insider trading; Investor sentiment; Economic policy uncertainty (search for similar items in EconPapers)
JEL-codes: G14 G32 (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:s1544612324007347

DOI: 10.1016/j.frl.2024.105704

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