Xu Runyu

WuXi Taihu University

Abstract：

Using Chinese A-share listed companies from 2015 to 2023 as the research sample, this study regards the staggered expansion of margin-trading and short-selling eligibility as a quasi-natural experiment. A multi-period difference-in-differences framework is used to identify how short-selling mechanisms influence corporate digital transformation and to clarify the transmission channel behind this effect. The empirical results show, first, that the introduction of short-selling pressure significantly lowers the level of corporate digital transformation; the coefficient on the core DID variable is -0.947 and is significant at the 5% level. Second, digital talent allocation partially mediates this relationship. The indirect effect explains about 25.1% of the total effect, suggesting that short-selling pressure reduces firms' digital transformation capacity partly by weakening the recruitment and retention of highly educated employees. Third, the COVID-19 pandemic attenuates the negative effect of short-selling mechanisms on digital transformation. The coefficient on the interaction term is 0.973 and is significant at the 1% level, indicating that the pandemic shifted digitalization from a discretionary strategic option to an operational necessity and thereby changed managers' resource-allocation priorities. Fourth, heterogeneity tests indicate that the suppressive effect is more evident among state-owned enterprises and firms in highly digitalized industries. This study broadens the theoretical understanding of the way capital-market governance tools shape firms' long-term strategic investment and offers new evidence on the interaction between external governance pressure and internal human-capital allocation.

Key Words：

short-selling mechanisms; corporate digital transformation; digital talent allocation; COVID-19 pandemic; multi-period DID