Work

Can digital transformation help alleviate corporate financial redundancy?

Year: 2024

Type: article

Abstract: This paper examines the relationship between digital transformation and corporate financial redundancy. Based on listed firms from 2011 to 2023, this paper adopts a two-fixed model to explore digital transformation's effects and underlying mechanisms on corporate financial redundancy. The findings reveal that digital transformation can effectively reduce financial redundancy, and the impact is achieved by improving internal control management and information disclosure quality and alleviating executives’ agency costs. Heterogeneous analysis explores how enterprises’ ownership and life cycle affect different policy effects. Specifically, non-state-owned firms and firms that are growing and maturing benefit more from digital transformation. The findings offer valuable insights for the government in formulating policies related to digitization and for firms in implementing digital transformation.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2024.103772

Authors: Meiling Lu, Qingchi Han, Qingmin Hao

Institutions: Jinan University, Guangzhou Civil Aviation College, Guangdong University Of Finances and Economics, Tianjin University

Language: English

Topic: Digital Economy and Transformation

Subfield: Strategy and Management

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Peace, justice, and strong institutions, Decent work and economic growth

Open Access status: hybrid

Estimated APC paid: $2,790