Can Digital Transformation Of Enterprises Curb Excessive Financialization

Abstract

Along with the slowdown of domestic economic growth, excessive financialization of enterprises has become increasingly common. Whether digital transformation, as a new driving force for the development of the real economy, can curb the excessive financialization of enterprises remains to be tested. This paper explores the impact of corporate digital transformation on corporate over-financialization and its mechanism of action, taking Shanghai and Shenzhen A-share listed companies from 2011-2021 as the research object. It is found that the digital transformation of enterprises can suppress excessive financialization, and financing constraints play a mediating role in the digital transformation of enterprises to hide excessive financialization. Further research shows that the higher the level of financialization, the more they are affected by the inhibiting effect of corporate digital transformation. This paper provides strong evidence for the controversy over the impact of corporate digital change on excessive financialization. It provides an important reference for companies to actively embrace digital transformation and de-financialize and for governments to continue to promote the deep integration of the digital economy with the real economy.