Can digital transformation of enterprise improve the information environment of the capital market? ——Evidence from Analyst's perspective

Shu Li and Xiaoyun Zhang

International Review of Economics & Finance, 2025, vol. 97, issue C

Abstract: Digital transformation is an imperative choice for enterprises to carry out strategic transformation in recent years. Based on the sample of A-share listed companies in China from 2008 to 2021, this paper empirically investigates the impact of enterprise digital transformation on analyst following and the quality of earnings forecast. The study findings indicate that the enterprise digital transformation significantly elevates the analyst following, supplements the accuracy of analyst forecasting, and lowers the dispersion of analyst forecasting. Furthermore, the mechanism test highlights that the digital transformation exerts a noticeable effect on analyst following as well as the quality of earnings forecast through two main paths, namely: alleviating information asymmetry and reducing earnings volatility. This paper provides strong evidence for the digital transformation of enterprises to improve the information environment in the capital market.

Keywords: Digital transformation; Capital markets; Analyst following; Analyst forecast; Information environment (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:97:y:2025:i:c:s1059056024007652

DOI: 10.1016/j.iref.2024.103773

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