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Does corporate digital transformation reduce the level of corporate leverage manipulation?

Author

Listed:
  • Zhao, Zhilong
  • Rong, Shu
  • Fang, Wu

Abstract

Digital transformation (DX) has emerged as a key focus in Chinese enterprises’ strategic realignment, but its effectiveness in mitigating leverage manipulation remains debatable. Using data from A-share listed companies in China, this study empirically investigates the impact of DX on corporate leverage manipulation. Results show that DX significantly reduces leverage manipulation. Furthermore, DX has a particularly strong mitigating effect on non-state-owned enterprises, small and medium-sized enterprises, and companies located in less marketized regions. By filling a gap in the existing literature on the relationship between DX and leverage manipulation, this study illuminates the pivotal role of digital strategies in fortifying financial market stability.

Suggested Citation

  • Zhao, Zhilong & Rong, Shu & Fang, Wu, 2024. "Does corporate digital transformation reduce the level of corporate leverage manipulation?," Finance Research Letters, Elsevier, vol. 69(PA).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pa:s1544612324011395
    DOI: 10.1016/j.frl.2024.106110
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    More about this item

    Keywords

    Digital transformation; Corporate leverage manipulation level; Digital economy;
    All these keywords.

    JEL classification:

    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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