Digital Transformation of Enterprises and the Governance of Executive Corruption

Abstract

This paper measures enterprise digital transformation by the method of text analysis and empirically tests the impact of enterprise digital transformation on the executives' corruption. We find that the higher degree of digital transformation of enterprises, the lower the probability of corporate executives' corruption. This conclusion is still valid under a series of robustness tests. The mechanism test shows that the impact of enterprise digital transformation on the governance of executives' corruption is mainly realized by reducing the degree of information asymmetry and alleviating the agency problem. Further research finds that both proportion of institutional investors and internal control can strengthen the reducing effect of digital transformation on the probability of corporate executives' corruption. The research conclusion of this paper reveals the governance effect of enterprise digital transformation on corporate executives' corruption, and provides effective experience for the central government and enterprise anti-corruption actions.