Abstract
ABSTRACTUsing a sample of Chinese A-share-listed firms from 2007–2019, we explore how corporate financialization affects digital transformation. The findings suggest that corporate financialization has a negative effect on digital transformation and that the relationship is more pronounced in low productivity firms, traditional industries, and high bankruptcy risk groups. The results are robust to using an alternative measurement, adopting a reduced sample, and excluding city-level factors. In addition, we develop three conceptual frameworks based on the prevailing theories (crowding out effect, financial constraint effect, and substitution effect). The research provides practical implications for firms’ financialization behaviour and digital transformation path.
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