Work

Govern digitalization with digitalization: government digital governance and corporate false digital disclosure

Year: 2026

Type: article

Abstract: Digital technologies disrupt traditional regulatory paradigms, necessitating urgent adaptation to enhance administrative efficacy. The extant literature focuses on internal governance or market mechanisms, yet overlooks their limitations against the technical opacity of digital technologies. Leveraging the establishment of municipal Big Data Bureaus as a quasi-natural experiment, this study utilizes Chinese A-share listed companies (2013–2023) to construct a staggered DID model. We assess the impact of government digital governance on corporate false digital disclosure. Results reveal that digital governance significantly curbs false disclosure by reducing political rent-seeking and improving policy efficiency. Furthermore, data element circulation and property rights protection reinforce this inhibitory effect. Unlike studies treating false disclosure as homogeneous, we identify asymmetric governance boundaries. Specifically, the disciplining effect is pronounced for "digital washing" but attenuates for "digital silence" due to horizontal competitive pressures and vertical regulatory costs. Heterogeneity analysis indicates stronger effects in regions with higher data factor marketization, digital adoption, and data transport capabilities. Consequently, this research provides evidence for constructing differentiated regulatory models, enriching the literature on the effectiveness and boundaries of government governance. • The dual connotations of digital governance in government are analyzed theoretically. • Government digital governance inhibits false disclosure by reducing firms' rent-seeking opportunities and improving policy efficiency. • Data elements circulation and data ownership protection play a moderating role. • Horizontal competitive pressures and vertical regulatory costs may offset governance effects.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2026.104974

Authors: Yuxiang Li, Chengcheng Zhu

Institution: Chongqing University

Language: English

Topic: Auditing, Earnings Management, Governance

Subfield: Accounting

Field: Business, Management and Accounting

Domain: Social Sciences

SDG: Peace, justice, and strong institutions

Open Access status: gold

Estimated APC paid: $1,930