Inhabiting influence of digital finance on stock price synchronicity

Muhammad Ayaz, Zaheer Anwer, M. Kabir Hassan and Xu Xiaoyang

Global Finance Journal, 2025, vol. 64, issue C

Abstract: We examine how digital finance can influence stock price synchronicity in China for the period of 2011–2021. Results suggest that the digital finance index, coverage breadth, usage depth, and digitalization level can significantly reduce stock price synchronicity. The possible channels of this linkage are information opacity and stock price crash risk. We find that digital finance is effective in reducing stock price synchronicity only in state-owned enterprises and large firms. The results are robust and immune to reverse causality and endogeneity and have important implications for investors and policymakers.

Keywords: Digital finance; Stock price synchronicity; Information transparency; China (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:glofin:v:64:y:2025:i:c:s1044028324001297

DOI: 10.1016/j.gfj.2024.101057

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