Digital transformation is not a painless change:Evidence from corporate risk

Fengzhong Liu and Xing Liu

Pacific-Basin Finance Journal, 2024, vol. 86, issue C

Abstract: Digital transformation (DT) is a must for enterprises, however, enterprises first face more challenges and shocks in the process of DT. Based on the data of A-share listed companies from 2012 to 2020, we find that DT increases corporate risk (CR). Multiple tests provide convincing support for the robustness of our baseline results. We prove that the risk policy of expanding digital innovation activities is an important channel through which DT leads to an increase in CR. In addition, we test for cross-sectional variation in baseline effects. The promotion effect of DT on corporate total risk is mainly driven by high-tech enterprises and fierce industry competition environment. Overall, this paper highlights the unintended outcomes of DT on corporate operations through specific risk policy mechanisms, offering crucial practical insights on risk management for firms in DT.

Keywords: Digital transformation; Corporate risk; Risk-related policy choices (search for similar items in EconPapers)
Date: 2024
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0927538X24001781
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:pacfin:v:86:y:2024:i:c:s0927538x24001781

DOI: 10.1016/j.pacfin.2024.102427

Access Statistics for this article

Pacific-Basin Finance Journal is currently edited by K. Chan and S. Ghon Rhee

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