The risk effects of corporate digitalization

Exacerbate or mitigate

Bibliographic Data

ID22230992
AuthorsKangqi Jiang (0000-0002-7171-5594, Shantou University), Lulu Chen (0000-0001-9621-9231, Shantou University), Jiayun Li (0000-0003-3957-3538, Shantou University), Xinyi Du (0009-0007-5434-0130, Jinan University, corresponding author)
Year2025
Volume12
Issue1
Publication date2025-03-05
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueHumanities and Social Sciences Communications (JOURNAL)
Journal identifiersISSN: 2662-9992 • E-ISSN: 2662-9992
PublisherSpringer Science and Business Media LLC (PUBLISHER)
DOI10.1057/s41599-025-04628-y
OpenAlexW4408140157
LanguageEN
References cited112

This study elaborates on the risk effects of corporate digital transformation (CDT). Using the ratio of added value of digital assets to total intangible assets as a measure of CDT, this study overall reveals an inverse relationship between CDT and revenue volatility, even after employing a range of technical techniques to address potential endogeneity. Heterogeneity analysis highlights that the firms with small size, high capital intensity, and high agency costs benefit more from CDT. It also reveals that advancing information infrastructure, intellectual property protection, and digital taxation enhances the effectiveness of CDT. Mechanism analysis uncovers that CDT not only enhances financial advantages such as bolstering core business and mitigating non-business risks but also fosters non-financial advantages like improving corporate governance and ESG performance. Further inquiries into the side effects of CDT and the dynamics of revenue volatility indicate that CDT might compromise cash flow availability. Excessive digital investments exacerbate operating risks. Importantly, the reduction in operating risk associated with CDT does not sacrifice the potential for enhanced company performance; rather, it appears to augment the value of real options

Business · Big Data and Business Intelligence · Business and Economic Development · Economic and Technological Systems Analysis

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Open DOIOpen Access