The impact of digital transformation on stock market volatility--Based on information asymmetry theory

Abstract

The use of information asymmetry theory in financial markets has both new potential and challenges due to the growing digitization of the economy. This study aims to investigate how the growth of information asymmetry theory is aided by digital transformation and to take a comprehensive look at how both affect stock market volatility. This study’s theoretical analysis and empirical research reveal that digital transformation lowers the cost of acquiring information and speeds up information processing, which in turn significantly affects stock market volatility and lessens information asymmetry in the market.