Journal of Humanities, Arts and Social Science

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Article http://dx.doi.org/10.26855/jhass.2024.07.014

Investigating the Impact of Digital Transformation on Equity Financing: Empirical Evidence from Chinese A-share Listed Enterprises

Yingda Tang

UCLA Anderson School of Management, Los Angeles, CA 90095, USA.

*Corresponding author: Yingda Tang

Published: August 6,2024

Abstract

Using a sample of 925 Chinese A-share listed enterprises on the Shenzhen Stock Exchange and Shanghai Stock Exchange, this study examines the impact of digital transformation on corporate equity financing for the period of 2011-2021. This study employs a two-way fixed effects regression model with time and company fixed effects. The findings show the positive effects of digital transformation on equity financing, indicating that digital transformation increases equity financing for Chinese A-share listed enterprises. These findings are further confirmed by the 2SLS regression test. Intrinsic mechanism analysis shows that digital transformation alleviates the financing constraints to improve corporate equity financing. Additionally, heterogeneity analysis shows that SOEs and firms with low innovation levels are more exposed to the benefits of digital transformation to foster equity financing. This study presents significant implications for policymakers by encouraging them to employ digital technologies to promote their financing campaigns to attract equity investors.

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How to cite this paper

Investigating the Impact of Digital Transformation on Equity Financing: Empirical Evidence from Chinese A-share Listed Enterprises

How to cite this paper: Yingda Tang. (2024) Investigating the Impact of Digital Transformation on Equity Financing: Empirical Evidence from Chinese A-share Listed Enterprises. Journal of Humanities, Arts and Social Science8(7), 1620-1632.

DOI: http://dx.doi.org/10.26855/jhass.2024.07.014