The effect of corporate digital transformation on the cost of equity

Yan Wang and Bing Feng

Applied Economics Letters, 2025, vol. 32, issue 11, 1558-1563

Abstract: This research explores the nexus between a firm’s digital transformation and its equity-related expenses. Drawing on data from China spanning from 2007 to 2022, the findings reveal a tendency for firms undergoing advanced digital metamorphosis to exhibit reduced informational opacity and enhanced governance structures, resulting in decreased equity costs. This effect is more distinct in private sector companies. The study enriches the discourse on the economic impacts of digitalization and elements shaping equity costs, offering valuable guidance that can inform corporate digital strategies.

Date: 2025
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DOI: 10.1080/13504851.2024.2308568

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