The Impact of Disclosing Digitalization Information on Corporate Financial Performance

Elena Fedorova; Pavel Drogovoz; Alexandr Nevredinov

doi:10.17323/j.jcfr.2073-0438.18.2.2024.56-69

Elena Fedorova Financial University under the Government of the Russian Federation, Moscow, Russia https://orcid.org/0000-0002-3381-6116
Pavel Drogovoz Bauman Moscow State Technical University, Moscow, Russia https://orcid.org/0000-0003-2560-7944
Alexandr Nevredinov Bauman Moscow State Technical University, Moscow, Russia https://orcid.org/0000-0003-3826-1305

DOI: https://doi.org/10.17323/j.jcfr.2073-0438.18.2.2024.56-69

Keywords: companies, signaling theory, digitalization, digital transformation, investment attractiveness, text analysis, random forest

Abstract

The purpose of the present study is to assess the relationship between digitalization disclosure indicators and market capitalization in the Russian market, including during the COVID-19 pandemic. The research methodology includes text analysis to evaluate various components of digital transformation (business model transformation, process transformation, domain transformation, organization transformation) and digitalization. The model was assessed using panel regression and machine learning methods. The empirical basis of the study included financial indicators of 70 Russian companies and annual reports for 2017–2021. The main results are: 1) wider disclosure of information about digitalization in the annual reports of Russian companies increased company market capitalization; 2) the transformation of processes and organizations
was highly significant for Russian companies; 3) the COVID-19 pandemic accelerated digitalization and led to a partial catch-up in the level of digitalization among less advanced companies. The results of this study can be used by investors and company management to develop more competent and comprehensive digital policies.

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The Impact of Disclosing Digitalization Information on Corporate Financial Performance

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