increasing the bubble level of firms' stock prices on the relationship between corporate digital transformation and the risk of falling stock prices

Document Type : Original Article

Author

phd

Abstract

The fall in prices in the capital market leads to a lack of trust in this market among capital market participants, especially investors. Therefore, identifying the factors affecting price collapse and providing appropriate solutions to prevent this phenomenon is important, especially in an era when the economy and trade are undergoing rapid digital transformation, all businesses are involved in the phenomenon of digitalization, and companies are forced to take steps towards digital transformation. The aim of the current research is to investigate whether the corporate digital transformation leads to a reduction in the risk of falling stock prices of companies or not. Also, the interactive role of increasing the bubble level of companies' stock prices is also measured. Using the considered limitations, 141 companies were selected as the research sample in the period of 2017-2023. The research method of the present study was applied and used a post-event approach (through past information). In order to test the hypotheses of the research, multivariate linear regression based on panel data was used using Eviews12 software. After the investigations, it was determined that there is a negative and significant relationship between corporate digital transformation and the risk of falling stock prices at the error level of 0.05. This result shows that corporate digital transformation reduces the risk of falling stock prices. Also, the effect of corporate digital transformation in reducing the risk of stock price crash is weakened by the increasing level of stock price bubble.

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References

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Budget and Finance Strategic Research
Volume 6, Issue 1 - Serial Number 21
Spring Quarterly
April 2025
Pages 135-158

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History

  • Receive Date: 27 September 2024
  • Revise Date: 16 January 2025
  • Accept Date: 11 February 2025

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