JOURNAL ARTICLE

How digital transformation affects the cost of equity capital: the role of information disclosure quality and stock liquidity.

  • Published In: Industrial & Corporate Change, 2024, v. 33, n. 5. P. 1098 1 of 3

  • Database: Psychology Source 2 of 3

  • Authored By: Ren, Lijun; Liu, Jiajia; Hao, Qianyi 3 of 3

Abstract

This article investigates the impact of enterprise digital transformation on the cost of equity capital for Chinese companies listed on the Shanghai and Shenzhen A-share markets from 2011 to 2021. It finds that digital transformation significantly reduces the cost of equity financing—by approximately 8.8% for every 1% increase in digital transformation—primarily through improving information disclosure quality and enhancing stock liquidity, both independently and via a chain mediation effect. The study also reveals that this effect is stronger for large-scale, non-state-owned, non-high-tech enterprises, and those located in eastern China. These findings underscore the importance of digital transformation in alleviating financing costs and suggest targeted policy support to promote digital adoption across diverse enterprise types and regions.

Additional Information

  • Source:Industrial & Corporate Change. 2024/10, Vol. 33, Issue 5, p1098
  • Document Type:Article
  • Subject Area:Business and Management
  • Publication Date:2024
  • ISSN:0960-6491
  • DOI:10.1093/icc/dtad053
  • Accession Number:178813435
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