The impact of fiscal transparency on enterprise digital transformation: evidence from China
Peixi Miao, Kuicheng Ye, Qianqian Du, Yitong Wang · Applied Economics · 2025
Transparency of government information plays an important role in impacting firms’ operations. Higher transparency can reduce political and economic uncertainty and improve the overall information environment, thereby reducing the negative impact on firms’ investment decisions. Using municipal level fiscal transparency, we find a significant positive relationship between local government fiscal transparency and enterprise digital transformation. Specifically, an increase of one standard deviation in fiscal transparency leads to a 2.04% improvement in the level of enterprise digital transformation. This effect remains significant in a series of robustness checks. Further analysis suggests that fiscal transparency significantly reduces the cost of debt, decreases uncertainty as estimated from analysts’ textual reports, and promotes more efficient resource allocation, thereby supporting the view that higher fiscal transparency facilitates digital transformation. Overall, this paper highlights the critical role of government behaviour at the micro level.