Abstract
We investigate the effect of corporate digital transformation on the excess perk consumption of executives (henceforth, excess perk consumption) using a sample of Chinese listed companies from 2010 to 2021. The results show that corporate digital transformation increases excess perk consumption by aggravating information asymmetry between insiders and outsiders, and by increasing business complexity. Cross-sectional analyses show that the effect of corporate digital transformation on excess perk consumption is stronger in firms with higher managerial power, state-owned enterprises, and high-tech firms. Our study provides new insights into the digital transformation paradox and has policy implications for regulators and enterprises.
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