Encourage or inhibit: A study on the impact of corporate digital transformation on management’s tone manipulation of information disclosure
Lingyun Yang, Zhihong Zhang, Lulu Wang, Yikai Liang, Reza Rostamzadeh, Reza Rostamzadeh, Reza Rostamzadeh, Reza Rostamzadeh
TL;DR
This study explores how corporate digital transformation affects management's manipulation of information disclosure tone in Chinese companies.
Contribution
The paper reveals that digital transformation can encourage tone manipulation, especially when management is overconfident.
Findings
Digital transformation fosters tone manipulation during its early stages.
Media slant and financial flexibility moderate the relationship between digital transformation and tone manipulation.
Management overconfidence partially mediates the impact of digital transformation on tone manipulation.
Abstract
Digitalization is anticipated to substantially improve information transparency and enhance the capital market’s information environment. However, during the initial phase of digital transformation, companies face challenges in achieving high-quality information disclosure. This is because digital technology implementation and organizational adjustment are still at early stages. Concurrently, investors face difficulties in assessing the accuracy of disclosed information. This challenge provides management with the opportunity to overstate the benefits of digital transformation. This study investigates the impact of corporate digital transformation on management’s tone manipulation behavior, using a sample of Chinese A-share listed companies from 2012 to 2021. Findings indicate that corporate digital transformation significantly fosters management’s tone manipulation during its…
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Taxonomy
TopicsAuditing, Earnings Management, Governance · Corporate Finance and Governance · Blockchain Technology Applications and Security