A Research On The Impact Of Digital Transformation On Information Disclosure Quality Of China Listed Firms

In the great practice of the reform and opening up,Chinese capital market has spanned a century of development of foreign capital markets in 30 years,and has achieved remarkable development achievements.At present,Chinese capital market has entered a new phase of deepening the reform.The registration-based IPO system has been implemented on the STAR Market and the Growth Enterprise Market since 2019,which reflects China’s determination to comprehensively enhance the functions of the capital market.Information is the core of the capital market,and enhancing the information disclosure quality is the key to the success of registrationbased IPO system,and it also has a significant influence on the high-quality development of the capital market.However,with the continuous expansion of the capital market,information disclosure scandals of listed companies still occur frequently in China,although there are strict rules to restrict the behavior of corporate information disclosure from the outside.Among the 227 disciplinary executions issued by the Shenzhen Stock Exchange in 2020,information disclosure violations of listed companies accounted for 42%.Strict information disclosure system can only restrict companies’ behavior from external institutional level.To ensure the ultimate enhancement of information disclosure quality,the key is to have proper corporate governance arrangements.At present,emerging digital technologies such as artificial intelligence,blockchain,cloud computing,and big data have become the booster of the digital economy and the catalyst for the digital transformation of companies,the principal part of the national economy,to implement digital transformation.In the process of applying digital technology to carry out digital construction and empower transformation,the application of digital technology enables companies to carry out corporate governance reform with the help of technological innovation,and also provides the possibility of improvement for the information to be disclosed by companies in all links from generation,dissemination to preservation.Existing studies shows that digital transformation has brought about subversive changes to the internal business performance and management structure,but the impact on information disclosure,an important market behavior of listed companies,has not been explored.In this regard,this paper takes the quality of information disclosure as the main research object,investigates the effect of the enterprises’digital transformation process on the quality of information disclosure,which is an expansion of the research category of the influence of digital transformation on companies.This paper reviews the research literatures on digital transformation and information disclosure quality,analyzes the development process and the current situation of digital transformation of Chinese companies.Then based on classical theories,this paper discussed the theoretical influence of digital transformation on the information disclosure quality,analyzes the effect path and possible moderating effect,and puts forward theoretical hypothesizes.After that,the panel data of Shenzhen Stock Exchange listed companies from 2010 to 2020 are used to empirically study the effect of digital transformation on the information disclosure quality,and examines the mechanisms.At the same time,instrumental variable method and propensity score matching method are used to solve the possible endogeneity problems of the models,and the robustness tests are carried out by replacing indicators and removing some samples.Considering that differences in corporate characteristics will lead to different information disclosure effects of digital transformation,heterogeneity analysis is carried out from the perspectives of property rights and high technology.The main conclusions are as follows.(1)Digital transformation can dramatically increase the information disclosure quality of listed companies.(2)The positive effect of digital transformation on the information disclosure quality of listed companies has two mechanisms: Initially,digital transformation can improve the quality of internal control.The application of digital technology improves the information disclosure quality by breaking down departmental information barriers,increasing monitoring methods,and suppressing management opportunistic behavior.Moreover,digital transformation will increase corporate financial stability.Using digital technology,companies will make operational decisions with more accurate risk control capabilities,reduce financial risks,improve financial stability,thus promote companies to actively disclose high-quality information,and send positive signals to the market.(3)Diversification will weaken the optimization effect of enterprises digital transformation on the disclosure quality.Under the circumstance of industry concentration,the promotion effect of digital transformation on the information disclosure level of listed companies will be strengthened.(4)The reforming of digital transformation on information disclosure quality is highly different in terms of enterprise characteristics: the digital transformation of non-state enterprises and hightech enterprises has a more obvious reforming effect on the information disclosure quality.The research in this paper confirms that digital transformation can improve the information disclosure quality,broadens the research perspective on the economic consequences of digital transformation,and provides a new perspective for how to optimize the information disclosure quality of listed company in the digital era.