Measuring the Impact of Digital Transformation on Mitigating Stock Market Crash Risks: A Long-term and Short-term Perspective

Amidst the swift advancements in artificial intelligence and big data, digital transformation has emerged as a cornerstone for enterprises to bolster competitiveness and streamline operational efficiency. Nevertheless, the volatility of financial markets and the specter of stock market crashes impede the vibrant growth of listed firms. This study endeavors to meticulously examine the impact of digital transformation on stock price stability, adopting both short- and long-term perspectives. Initially, pertinent word vectors associated with digital transformation are curated to establish a mining lexicon, which informs the utilization of text mining methodologies to extract insights from listed companies' annual reports spanning 2012 to 2022. Following data synthesis and analysis, a definitive digital transformation index is derived. Key findings reveal that enterprise digital transformation notably dampens stock price collapse risks, with this mitigating effect progressively amplifying over time. Ultimately, integrating theoretical and empirical insights, we offer recommendations tailored to enterprises, governments, and investors.