Who Is Manipulating Corporate Wallets Amid the Ever-Changing Circumstances? Digital Clues, Information Truths and Risk Mysteries

Abstract

Digital transformation (DT) has emerged as a key strategic lever for enhancing firm resilience and competitiveness, yet its influence on non-productive investment behaviors, such as corporate financial investment, remains underexplored. Existing studies have largely focused on DT’s role in innovation and operational efficiency, leaving a significant gap in understanding how DT reshapes firms’ financial asset allocation. Drawing on a unique panel dataset of A-share main board-listed firms in China from 2011 to 2023, this study provides novel empirical evidence that DT significantly restrains financial investment, with pronounced heterogeneity across ownership types. More importantly, this paper uncovers a multi-layered mechanism: DT enhances the corporate information environment, which subsequently reduces financial investment. In addition, the analysis reveals a moderated mediation mechanism wherein economic uncertainty dampens the information-enhancing effect of DT. Unlike previous research that treats corporate risk-taking as a parallel mediator, this study identifies a sequential mediation pathway, where improved information environments suppress financial investment indirectly by influencing firms’ risk-taking behavior. These findings offer new theoretical insights into the financial implications of DT and contribute to the broader understanding of enterprise behavior in the context of digitalization and economic volatility.