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Corporate digital innovation and stock price crash risk

Author

Listed:
  • Liu, Yan
  • Suo, Xuekun
  • Du, Xiuhong
  • Wu, Hengqin
  • Lin, Han

Abstract

Through the lens of bad news hoarding theory, this study empirically examines the influence of corporate digital innovation on stock price crash risk based upon the listed Chinese manufacturing firms from 2010 to 2022. The results show that corporate digital innovation could significantly mitigate stock price crash risk with structural heterogeneity (i.e. industry, ownership, and region). The observations still hold after addressing endogeneity issue and robustness tests. The findings contribute to a deeper understanding of the role of innovation strategy enabled by digital technology in capital markets and enlighten new insights into reducing crash risks.

Suggested Citation

  • Liu, Yan & Suo, Xuekun & Du, Xiuhong & Wu, Hengqin & Lin, Han, 2024. "Corporate digital innovation and stock price crash risk," Finance Research Letters, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324007207
    DOI: 10.1016/j.frl.2024.105690
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    References listed on IDEAS

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    More about this item

    Keywords

    Digital innovation; Stock price crash risk; Bad news hoarding; Capital markets; Risk management;
    All these keywords.

    JEL classification:

    • G12 - Financial Economics - - General Financial Markets - - - Asset Pricing; Trading Volume; Bond Interest Rates
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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