How does information disclosure affect liquidity? Evidence from an emerging market

Arango, Ignacio; Agudelo, Diego A.

doi:10.1016/j.najef.2019.100997

Cited by 4 publications

(1 citation statement)

References 83 publications

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“…Thus, higher information disclosure can effectively decrease the information asymmetry among stakeholders, enhance investors’ market attention and trading confidence, attract more investor participation, and thus foster the improvement of stock liquidity [ 48 , 49 ]. For enterprises with poor information disclosure, investors lack the basis for value judgment and cannot efficiently assess enterprise value, increasing the likelihood of internal transactions, agent conflicts, and other difficulties and reducing investors’ willingness to hold, which leads to diminished stock liquidity [ 50 , 51 ]. Enterprise digital transformation disrupts the "information island", extends the information search channel through digital technology, enhances the scope and quality of enterprise information disclosure, and alleviates the problem of stakeholder information bias and adverse selection.…”

Section: Theoretical Analysis and Research Hypothesesmentioning

confidence: 99%

Enterprise digital transformation’s impact on stock liquidity: A corporate governance perspective

Liu,

Zhu,

Cheng

2024

PLoS ONE

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The innovation in technology and economic growth, which are brought about by digital transformation in enterprises, will inevitably impact their performance in the capital market. Using a sample of Chinese A-share listed companies from 2012 to 2021, this study extensively examines the impact, mechanism, and economic consequences of enterprises digital transformation on stock liquidity. The research reveals that enterprises digital transformation can significantly improve stock liquidity. From the perspective of corporate governance, a further analysis indicates that the digital transformation of enterprises can improve stock liquidity by three mechanisms: easing financing constraints, improving the quality of internal control, and enhancing information disclosure. The results of the heterogeneity analysis indicate that the digital transformation of enterprises, combined with a high level of financial technology, developed financial markets, and policy guidance, has a significantly more significant effect on improving stock liquidity. The analysis of economic consequences reveals that the digital transformation of enterprises can lower the risk of a stock price crash and enhance the accuracy of analysts’ forecasts, primarily by improving stock liquidity. This study offers empirical evidence from a micro-mechanism perspective that elucidates the spillover effect of enterprise digital transformation on the capital market. It provides insight into the impact of enterprise digital transformation on stock liquidity and offers theoretical guidance to promote the adoption of enterprise digital transformation across different countries and enhance stock liquidity in the capital market.

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