The dark side of digital transformation: Evidence from opportunistic insider selling

Xiaotong Yang and Rongrong Xie

Finance Research Letters, 2024, vol. 67, issue PB

Abstract: While the benefits of corporate digital transformation are well-documented, evidence of its dark side is scarce. This study examines the effect of corporate digital transformation on opportunistic insider selling. Using a sample of Chinese A-share listed firms, we find that corporate digital transformation significantly contributes to opportunistic insider selling. Moreover, we find that this effect is particularly pronounced for firms that exhibit high information asymmetry, possess weak corporate governance, or have powerful executives. Further analysis suggests that digital transformation increases the profitability of opportunistic insider selling. Overall, our study sheds light on the adverse consequence of corporate digital transformation.

Keywords: Digital transformation; Opportunistic insider selling; insider selling profitability (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pb:s1544612324009322

DOI: 10.1016/j.frl.2024.105902

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