How to Effectively Reduce the Cost of Equity Capital in Enterprise Digital Transformation

Abstract

Abstract: How can digital transformation of enterprises more effectively reduce the cost of equity capital and alleviate the difficulty of enterprise financing? This is an important issue of concern for both academia and the industry. From the perspective of internal control, this paper discusses the effective ways of digital transformation of enterprises to reduce the cost of equity capital. Based on the data of A-share listed companies from 2011-2021, this paper uses the fixed effect model to conduct empirical research. The findings are as follows. Firstly, digital transformation of enterprises has a significant effect of reducing the cost of equity capital, but this reduction effect lags behind; Secondly, the quality of information disclosure and stock market liquidity play a mediating role in the effect of enterprise digital transformation on the cost of equity capital; Thirdly, internal control has a U-shaped moderating effect in the effect of enterprise digital transformation on the cost of equity capital; Fourthly, digital transformation of enterprises has a significant effect of reducing the cost of equity capital for both state-owned and non-state-owned enterprises, but has a greater impact on non-state-owned enterprises.

Key words: digital transformation, cost of equity capital, internal control, U-shaped moderating effect

Liu Jiajia, Ren Lijun, Wang Shouyang. How to Effectively Reduce the Cost of Equity Capital in Enterprise Digital Transformation[J]. Management Review, 2025, 37(7): 249-261.

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