Digital transformation in finance and its role in promoting financial transparency

Xiaoxue Gao

Global Finance Journal, 2023, vol. 58, issue C

Abstract: A crucial issue in financial economics pertains to enhancing the transparency of accounting and financial reporting within companies. This paper focuses on China, aiming to quantify the relationship between digital finance and financial accounting transparency from 1990 to 2021 using the autoregressive distributed lag bounds test. The results confirm that digital finance exerts a significant effect only in the long term; in the short term, it lacks the necessary efficacy to enhance financial transparency. The proliferation of information and communication technology (ICT) in China, in both the short and the long term, is a pivotal policy for augmenting accounting transparency. Moreover, an increase in both the short- and the long-term corporate income tax rate is poised to undermine the transparency of Chinese companies' financial statements. The foremost policy implications encompass the advancement of digital finance markets through cryptocurrencies, promotion of ICT diffusion policies, and enhancement of societal financial transparency literacy.

Keywords: China; Corporate income tax rate; Digital finance; Financial corruption; Financial transparency (search for similar items in EconPapers)
JEL-codes: F65 H23 K34 (search for similar items in EconPapers)
Date: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1044028323000984
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:58:y:2023:i:c:s1044028323000984

DOI: 10.1016/j.gfj.2023.100903

Access Statistics for this article

Global Finance Journal is currently edited by Manuchehr Shahrokhi

More articles in Global Finance Journal from Elsevier
Bibliographic data for series maintained by Catherine Liu ().