A Study On The Impact Mechanism Of Enterprise Digital Transformation On Analysts’ Earnings Forecasting Behavior

In recent years,with the development of digital technologies,the digital economy has become an important engine for promoting the development of productivity,and the digital transformation of the economy is the general trend.The enterprises are the main body of industrial digitalization and play an important role in the transformation of the digital economy.Existing research has found that enterprises digital transformation can change the traditional business model,industrial structure and competition pattern at the macro level.And at the micro level,it can improve productivity and financial performance.In addition,it will also have an impact on the capital market,improve stock liquidity and price information content.Analysts realize the functions of value discovery and information communication by analyzing the future earning status of enterprise and publishing earnings forecast reports.The quality of forecast reports affects the efficiency of analysts transmit information to the capital market.However,subject to analysts’ personal interests,information asymmetry,imperfect regulatory mechanisms and so on,analysts cannot always deliver valuable information,which will adversely affect the capital market.As the specific manifestation of digital economy in micro enterprises,digital transformation has triggered profound changes in enterprise organizational structure and management activities of enterprises.Therefore how digital transformation affects the interaction between enterprises and analysts needs to be further studied.The application of digital technology can not only improve information transparency and the level of internal control,but also reduce agency cost and business risk,exerting positive "information effect","governance effect" and "stability effect" to improve the information environment and operating conditions of enterprises,thereby improving analyst attention and earnings forecast accuracy.However,digital transformation may also increase the complexity of enterprises’ business operations,increase their financial and operational risks,reduce the comparability of industry information and historical information,resulting in negative "risk effect",which increasing the difficulty and cost of analysts’ earnings forecast and adversely affecting analysts’ attention and forecast quality.Based on this,this paper takes A-share listed companies in Shanghai and Shenzhen from 2007 to 2020 as the research samples.The results show that: First,enterprise digital transformation can significantly improve analysts’ attention and the accuracy of earnings forecasts.Second,the mechanism test shows that digital transformation can not only play the "information effect" by improving the dynamic capability and information transparency,but also play the "governance effect" by improving the level of internal control and reducing agency costs,and play the "stabilizing effect" by reducing customer concentration and environmental uncertainty level,so as to improve the information environment of enterprises,increase analysts’ attention and reduce the deviation and divergence of earnings forecast.Third,in terms of heterogeneity,this paper found in the higher strategic difference and larger enterprise size,the positive correlation between digital transformation and earnings forecasting behavior of analysts is more significant.And based on reputation model and resource support effect,star analysts can enhance the positive correlation between digital transformation and earnings forecasting behavior.At the same time,consistent conclusions are also drawn in enterprises with high media attention and those registered in the eastern region.Fourth,the attention of analysts and the improvement of the accuracy of earnings forecasts brought about by the digital transformation can relieve corporate financing constraints and improve the innovation performance.Contributions of this paper are as follows: First,the previous studies consider the influencing factors of analysts’ earnings forecasting behavior from the perspective of the characteristics of analysts and firms,information sources,but less research has focused on digital technology to explore the impact of digital transformation on analysts’ earnings forecasting behavior.This paper considers that digital transformation will affect the information transmission efficiency,governance structure and operation characteristics of enterprises,which is consistent with the influencing factors of analysts’ earnings forecasts,enriching the research on analyst earnings forecasting behavior.Second,previous studies mostly consider the impact of digital transformation on enterprise innovation efficiency,audit expenses,financial performance and so far.The influence of enterprise digital transformation on analysts’ earnings forecasting behavior hasn’t been deeply studied.This paper incorporates enterprise digital transformation and analyst behavior into the same research framework,complementing research on the economic consequences of enterprise digital transformation on capital markets.Third,this paper further studies the mechanism,dependencies and economic consequences of digital transformation on analysts’ earnings forecasting behavior,which has certain reference value for improving the quality of analysts’ earnings forecasts and promoting digital transformation of enterprises.