Enterprise Digital Transformation and Financial Risk

Abstract

Digital transformation is an inevitable choice for contemporary enterprises to accelerate sustainable development. This paper empirically analyzes the impact of digital transformation on the financial risk of enterprises, using the data of Chinese A-share non-financial listed companies from 2009-2021 as a sample. The results of the study show that the implementation of digital transformation has a significant effect on reducing corporate financial risk; it also examines that there is a substitution relationship between the quality of internal control and the marketization process on the suppression of corporate financial risk; further research analysis, the suppression effect of digital transformation on corporate financial risk is more significant in non-state-owned enterprises and competitive industry, the impact of digital transformation on mitigating financial risk is more significant in high-tech enterprises and higher research investment. Finally, the article proposes countermeasures and policy implications in three aspects: promoting the development and investment of digital transformation, improving the monitoring mechanism of digital economy development, and optimizing the supervision of enterprise digital transformation to increase social responsibility.