Can corporate digital transformation help curb the hollowing out of major shareholders?

Jun Zhou () and Lingyu Zhu
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Jun Zhou: Wuhan University of Technology
Lingyu Zhu: Wuhan University of Technology

A chapter in Proceedings of the 2024 9th International Conference on Social Sciences and Economic Development (ICSSED 2024), 2024, pp 442-457 from Springer

Abstract: Abstract Digital transformation has brought about major changes in the business model and governance mechanism of enterprises. Will this help curb the behavior of major shareholders hollowing out the company? Taking China’s A-share listed companies from 2010 to 2021 as the research object, the impact of corporate digital transformation on the hollowing out of major shareholders was empirically tested. Research results show that corporate digital transformation can inhibit major shareholders from hollowing out the company; analysis of the mechanism of action shows that corporate digital transformation inhibits major shareholders from hollowing out by easing financing constraints and reducing earnings management. Heterogeneity analysis shows that enterprise digital transformation has a more significant impact on western regions and non-state-owned enterprises. The research conclusion helps clarify the impact of corporate digital transformation on corporate governance and major shareholder hollowing out, and also provides a new idea for suppressing the hollowing out behavior of major shareholders of listed companies.

Keywords: enterprise digital transformation; corporate governance; hollowing out of major shareholders; financing constraints; earnings management; Law; social and behavioral sciences Economics (search for similar items in EconPapers)
Date: 2024
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DOI: 10.2991/978-94-6463-459-4_53

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