Can Enterprise Digital Transformation Reduce The Risk Of Stock Price Collapse?

Digital transformation plays a very important role in the high-quality and sustainable development of enterprises in the new round of industrial revolution.The development of China’s digital technology and digital economy is gradually becoming a solid force leading China’s social progress and economic growth.In the report of the 20th National Congress of the Communist Party of China,it is proposed to vigorously develop China’s digital technology and digital economy,accelerate the integrated development of the digital economy and the real economy,and strive to build a number of digital industrial clusters that are in line with China’s sustainable development strategy and have international competitiveness and influence.The stock price collapse is the abnormal phenomenon that the stock price of an enterprise plummets in the capital market in a short time.It will have a negative impact on the daily investment and financing activities of enterprises and the healthy development of the real economy,and even hinder the progress of the internationalization of China’s capital market.The relevant research on the risk of stock price collapse has become a hot topic in academic circles.Based on the sample data of 3525 listed companies in Shanghai and Shenzhen A-share market from 2011 to 2021,this paper uses empirical analysis,normative research and intermediary effect model to study the impact of corporate digital transformation on the risk of stock price collapse and explore the mechanism of the two from the perspective of the opportunity and motivation of the management to cover the market with bad news.The research finds that:(1)the digital transformation of enterprises can reduce the risk of stock price collapse;(2)The mechanism test indicates that digital transformation can reduce the risk of stock price collapse by improving the internal control quality of enterprises and easing the financing constraints faced by enterprises;(3)Heterogeneity research shows that in non-state-owned enterprises and large enterprises,digital transformation can more significantly curb the risk of stock price collapse;(4)For enterprises with a low shareholding ratio of institutional investors and enterprises with a high process of regional marketization,digital transformation can more significantly suppress the risk of corporate stock price crash.In order to ensure the reliability and robustness of the regression results of this study,instrumental variables,Heckman test,PSM test and other methods are used to alleviate the possible endogenous problems,and a series of robustness tests are carried out,which all support the above conclusions.This study supplements the deficiencies in the mechanism of the impact of digital transformation on the risk of corporate share price collapse,and can provide scientific reference for the regulatory authorities to strengthen supervision and the government departments to formulate more perfect digital transformation policies;Enterprises can carry out digital transformation based on this to reduce the opportunity and motivation of management to cover the market with bad news,thus reducing the risk of stock price collapse.