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Opportunistic behaviour behind corporate digitalization disclosure: The moderating role of economic policy uncertainty

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  • Guan, Kaolei
  • Fu, Mengting
  • Zhu, Haining

Abstract

We identify the opportunistic behavior behind corporate digitalization disclosure (CDD) from an insider trading perspective and the moderating effect of economic policy uncertainty (EPU) on this relationship using a sample of listed enterprises in China from 2009 to 2022. We find that insider opportunistic trading behavior significantly explains the phenomenon of more CDD in the prior period management discussion and analysis (MD&A) of the annual report, driven by CDD can elevate investor sentiment. The moderating model shows that EPU worsens the observed phenomenon. Overall, our findings suggest insider may exploit digital trends for self-interest in emerging capital markets.

Suggested Citation

  • Guan, Kaolei & Fu, Mengting & Zhu, Haining, 2024. "Opportunistic behaviour behind corporate digitalization disclosure: The moderating role of economic policy uncertainty," Finance Research Letters, Elsevier, vol. 66(C).
    • Handle: RePEc:eee:finlet:v:66:y:2024:i:c:s1544612324007347
    DOI: 10.1016/j.frl.2024.105704
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    More about this item

    Keywords

    Corporate digitalization disclosure; Insider trading; Investor sentiment; Economic policy uncertainty;
    All these keywords.

    JEL classification:

    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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