The impact of corporate digital transformation on share price synchronisation

Abstract

With the rapid development of the digital economy, digital transformation of firms has become an important factor affecting their operations and market performance. This study examines the impact of corporate digital transformation on stock price synchronisation, focusing on the mediating role of disclosure and corporate governance in it. Through empirical analyses of A-share listed companies in Shanghai and Shenzhen from 2010 to 2021, this paper finds that digital transformation significantly reduces firms' stock price synchronicity. Specifically, digital transformation reduces information asymmetry by enhancing the transparency of firms' disclosure and the efficiency of corporate governance, which reduces the synchronisation of firms' share prices with market volatility. In addition, this paper finds that digital transformation has a more significant impact on manufacturing and high-tech firms. This study not only enriches the theoretical research on the impact of corporate digital transformation, but also provides practical references for corporate managers and policy makers.