Enterprise Digital Transformation And High-Quality Development Of Capital Market

The new era marks a new direction,and the new direction breeds new missions.In the new era of socialism with Chinese characteristics,high-quality development has set a new direction.High-quality development has entrusted the capital market with the mission of realizing optimal allocation of resources,innovation-driven development,efficient integration of virtual and real economics,and rapid improvement of international competitiveness.Facing a new era and a new journey,high-quality development of the capital market will play an important role in optimizing the financial ecology and boosting high-quality economic development.Under a new economic form of the digital economy with data as the key factor of production,digital transformation relying on digital technology and data as the link is becoming an important starting point to promote the efficiency and power reform of the capital market,and a core engine to promote the highquality development of the capital market.As a micro foundation of the macroeconomy,enterprises are the core practice subject of digital transformation.Enterprises carry the important function of macro digital economy transformation and development,and shoulder the responsibility burden of high-quality development of the capital market.The digital transformation of enterprises will realize information interconnection through the deep embedding and enabling of digital technology.It will form an information interaction system of upper and lower linkage,left-right coordination,internal and external synchronization,and global penetration.Focus on the capital market,the digital transformation of enterprises will help break the information island,cross the data gap,release the data dividend,stimulate the internal vitality of the main participants,reduce potential systemic risks,and promote the capital market to move towards a path of highquality development that is standardized,transparent,open,dynamic,and resilient.Therefore,it is of great significance to correctly grasp the inevitable trend of enterprise digital transformation and development,understand and clarify the internal connection and logic between enterprise digital transformation and high-quality development of the capital market.Our research is important for accelerating the digital transformation and upgrading of enterprises,and boosting the high-quality development of the capital market with the sharp sword of digital.However,the existing literature on the relationship between the digital transformation of enterprises and the high-quality development of the capital market still lacks systematic analytical thinking,a unified analytical framework,in-depth analytical insights,and the analytical paradigm combining theory and empirical research,which is the foothold of this paper.The objective of this paper is to theoretically analyze the internal relationship between enterprise digital transformation and the high-quality development of the capital market,empirically explore the promoting effect of enterprise digital transformation on the high-quality development of the capital market from multiple dimensions,and reveal the black box of the mechanism behind the impact of enterprise digital transformation on the high-quality development of the capital market.This paper provides theoretical guidance and decision-making reference for promoting the high-quality development of the capital market with the support of digital transformation.Based on the core theoretical basis of asset pricing theory,enterprise change theory,information disclosure theory,and stock price crash theory,this paper constructs an economic model of enterprise digital transformation and some econometric models of causality between enterprise digital transformation and high-quality development of the capital market.We comprehensively analyze the high-quality development of the capital market and its micro-reaction mechanism to digital transformation from three dimensions,including enterprise value,investors’ rights and interests,and the extreme risk of the capital market.The main research work includes the following aspects.First,this paper constructs an economic model of enterprise digital transformation and theoretically deduces the mathematical relationship between enterprise digital transformation and the high-quality development of the capital market.In this research work,we describe the two-sector economic environment and the behavioral characteristics of the subjects of the two sectors and construct the enterprise digital transformation economic model that reflects the investment in digital technology.Next,we set the product market and labor market clearing conditions.According to the utility maximization of the household sector and the profit maximization of the production sector,we calculate the analytical solutions such as product price,product demand,and the stock price of digital transformation enterprises under the general equilibrium condition.Finally,we embed the strategic choice of digital transformation with the asset pricing framework and deduce the relationship between the digital transformation of enterprises and enterprise value,investors’ rights and interests,and extreme risks in the capital market.Second,this paper empirically discusses the value creation effect of enterprise digital transformation and deeply explores the mechanism of enterprise digital transformation affecting enterprise value from the perspective of quality improvement,cost reduction,and efficiency improvement.In this research work,we construct the conceptual model of the impact of enterprise digital transformation on enterprise economic value and social value and mechanism and propose research hypotheses.Next,we select A-share listed companies in Shanghai and Shenzhen as research samples.We use the frequency of digital transformation keywords in the firm’s annual reports as a digital transformation measure.We construct econometric models to test the research hypotheses.Finally,we discuss the causal relationship between enterprise digital transformation and enterprise value.We also provide some empirical evidence for the causal mechanism from the perspective of innovation momentum,production efficiency,external transaction cost,and internal control cost.Furthermore,we explore the boundary conditions of enterprise digital transformation affecting enterprise value,including enterprise property rights,technology attributes,regional market environment,and industry market competition degree.Third,this paper empirically explores the protection effect of enterprise digital transformation on investors’ rights and interests from the perspectives of information disclosure quality,audit quality,and dividend level,and the role of the business environment and legal environment on the relationship between enterprise digital transformation and investors’ rights and interests.In this research work,we develop the conceptual model of the impact of enterprise digital transformation on investor rights protection and effect mechanism and propose theoretical assumptions.Next,we give an empirical research proposal to examine the causal relationship and mechanism of enterprise digital transformation and investor rights through sample acquisition,data screening,variable measurement,and model construction.Finally,we empirically verify the causal effect of enterprise digital transformation on investors’ rights and the role of the business environment and legal environment.We further focus on the impact of enterprise digital transformation on large shareholders’ emptying behavior and violations.Fourth,this paper empirically discusses the governance effect of enterprise digital transformation on the extreme risk of the capital market,namely stock price crash risk,and explores the mechanism of enterprise digital transformation affecting the extreme risk of the capital market based on internal governance and external governance channels.In this research work,we construct the conceptual model of the impact effect and transmission mechanism of enterprise digital transformation on stock price crash risk and give the corresponding research hypotheses.Next,we present the research framework and implementation process to test the relationship and mechanism between enterprise digital transformation and stock price crash risk.Finally,we discuss the empirical results of enterprise digital transformation mitigating stock price crash risk,and the impact path of enterprise digital transformation on stock price crash risk from the perspective of internal governance channels including internal control and earnings management,and external governance channels including analyst attention and news media attention.In addition,our research also focuses on the impact of enterprise digital transformation on stock liquidity and stock price information efficiency.Based on the above research,we conclude the following conclusion:First,we find that the enterprises that have proceeded with digital transformation have higher economic and social values,higher levels of investor rights protection,and less extreme market risks.Second,we find that digital transformation significantly contributes to the improvement of the both economic and social value of enterprises.The mechanism study concludes that enterprise digital transformation enhances the dual value of enterprises by improving innovation dynamics and productivity and reducing external transaction costs and internal control costs.Further,we find that the value enhancement effect of enterprise digital transformation is more significant in state-owned enterprises,high-tech enterprises,high marketization degrees,and high market competition degrees.Third,we provided evidence that enterprise digital transformation significantly promotes the protection of investors’ rights,such as improving information disclosure quality,audit quality,and dividend level.The mechanism analysis concludes that the business environment and legal environment play a positive moderating role in the relationship between digital transformation and investors’ rights and interests.Further analysis reveals that enterprise digital transformation is conducive to restraining tunneling behavior and violations.Fourth,we find that enterprise digital transformation significantly reduces the stock price crash risk,the effect channels include improving the quality of internal control,reducing the degree of earnings management,and increasing analyst attention and media attention.The extended study concludes that enterprise digital transformation can improve stock liquidity and the information efficiency of stock prices.The main innovations of this paper are as follows:First,in terms of research intention,our research closely follows the major national strategic needs,connects the relationship between the enterprise digital transformation and the high-quality development of the capital market,and comprehensively examines the effect of digital transformation on the capital market at a systematic level.This paper actively responds to the national major strategic needs of digital China construction and high-quality development,incorporates the enterprise digital transformation and the highquality development of the capital market into the same research framework,and regards high-quality development of the capital market as an ecosystem of joint efforts of enterprises,investors and the market.We also deeply think and all-round analyze the internal relationship between the enterprise digital transformation and the high-quality development of the capital market.The result is an important supplement to the theoretical research and the decision-making reference for the practical promotion of the high-quality development of the capital market from the digital perspective.Second,in terms of research paradigm,we provide a research framework of the mathematical model,theoretical discussion,benchmark analysis,mechanism test,and extended investigation,which not only has scientific and rigorous mathematical relationship deduction but also has important theoretical support for research hypothesis analysis,as well as has detailed verification of large sample empirical data.The economic model of enterprise digital transformation lays a mathematical foundation for empirical research on the impact of enterprise digital transformation on firm value,investors’ rights and interests,and extreme risk in the capital market.In the subsequent empirical research,we develop the research hypothesis on the causal relationship and causal mechanism under the support of targeted and differentiated research theories.Our results will provide a new research paradigm and expand research ideas for the study of the relationship between enterprise digital transformation and high-quality development of the capital market.Third,in terms of research content,we highlight the basic conditions and important support for the enterprise digital transformation affecting the high-quality development of the capital market under the new development form of the digital economy,verify the effect through some effective empirical approaches,and open the black box of the mechanism for digital transformation affecting the high-quality development of the capital market.Specifically,when discussing the impact of enterprise digital transformation on enterprise value,this paper expands the connotation and extension of enterprise value,defines enterprise value as economic value and social value,and focuses on the channels of improving quality,reducing cost,and increasing efficiency,and the boundary conditions of enterprise attributes and market environment.When discussing the impact of digital transformation on investors’ rights and interests,we focus on the mechanism of enterprise digital transformation on information disclosure quality,audit quality,and dividend distribution,as well as the business environment and legal environment.When discussing the impact of enterprise digital transformation on extreme risk in the capital market,we focus on the transmission role of internal governance mechanisms and external governance mechanisms.The richness of the content is beneficial to deeply understand the impact and mechanism of enterprise digital transformation on the high-quality development of the capital market and provides theoretical guidance for stimulating the internal motivation of enterprise digital transformation and designing the development path of the high-quality capital market.Fourth,in terms of research methods,this paper constructs an economic model of enterprise digital transformation that reflects digital technology investment and establishes a mathematical analysis framework and logical deduction path of the relationship between enterprise digital transformation and high-quality development of the capital market.The economic model of enterprise digital transformation constructed in this paper can skillfully link enterprise digital technology investment with enterprise value,investors’ rights and interests,and the extreme risk of the capital market,and deduce the mathematical relationship,which expands the breadth and depth of the application of asset pricing theory in two-sector economic theory,and provides a mathematical model deduction idea for understanding digital transformation and high-quality development of the capital market.The magnificent picture of the new era is slowly spreading out,and the sound of the clarion call of the new journey inspires us.The capital market should respond to the call of the digital economy era,build the core force of digital transformation,play the strongest voice of high-quality development,ride the wind and waves,take the lead independently,and make steady progress.