Abstract
ABSTRACT The digital economy has a significant influence on the financial behavior of enterprises. According to the panel data of A-share listed enterprises in the manufacturing industry from 2010 to 2020, we discuss how manufacturing enterprises allocate their financial assets in the process of digitalization from the perspective of operating profit and risk taking. The results reveal that ICT investment significantly reduces financial asset allocation, while digital transformation improves the financial asset allocation of manufacturing enterprises. Because ICT investment increases operating profit from the main business, manufacturing enterprises reduce the allocation of short-term and long-term financial assets. We thus propose two phenomena: precautionary saving and substitutional investment. As digital transformation increases risk taking, financial assets are elevated by manufacturing enterprises for the precautionary saving motivation, boosting the short-term financial assets in their portfolios. These findings are further supported by the heterogeneity of innovation characteristics and ownership.
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