Big data analytics, firm risk and corporate policies: Evidence from China

Pengfei Sun, Chunhui Yuan, Xiaolong Li and Jia Di

Research in International Business and Finance, 2024, vol. 70, issue PB

Abstract: This study provides the empirical evidence on the impact of big data analytics (BDA) on firm risk. Using a combination of deep learning and text mining, we construct BDA indicators for a sample of Chinese A-share listed companies from 2003 to 2019. We find a significant positive relationship between BDA and firm risk. In addition, we identify several factors that significantly moderate the effect of BDA on firm risk. Examining the channels, we find that BDA affects corporate policy actions that lead to higher firm risk. Further, this study also shows that the improvement in BDA is value-enhancing for the firm and that this improvement is somewhat sustainable. The results of the test for endogeneity and other tests indicate that our causal relationship is robust.

Keywords: Big data; Firm risk; Corporate policy; Firm value (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:riibaf:v:70:y:2024:i:pb:s0275531924001648

DOI: 10.1016/j.ribaf.2024.102371

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