Does the digital transformation of listed tourism companies help improve investor relations? - Evidence from the interaction of information in capital markets
This study demonstrates that the digital transformation of listed tourism companies significantly improves investor relations by enhancing response accuracy through technological advancement, information processing, and management confidence, ultimately alleviating financing constraints, particularly within state-owned, profitable, and emerging sector enterprises.
Original paper licensed under CC BY 4.0 (https://creativecommons.org/licenses/by/4.0/). This is an AI-generated explanation of the paper below. It is not written or endorsed by the authors. For technical accuracy, refer to the original paper. Read full disclaimer
Imagine the stock market as a giant, bustling town square where companies and investors shout their news back and forth. For a long time, this square was noisy and chaotic, with companies sometimes hiding behind foggy windows or shouting vague answers to avoid trouble. But recently, a new tool has arrived: digital transformation. Think of this not just as buying fancy computers, but as giving a company a super-powered brain and a super-fast voice. It's like upgrading from a dusty, handwritten diary to a smart, cloud-connected assistant that can instantly find facts, understand complex questions, and speak clearly. In the world of business science, researchers are trying to figure out if this digital upgrade actually helps companies talk better to the people who lend them money (investors). If a company can answer questions more accurately, investors feel safer, trust grows, and the company can get the cash it needs to build new hotels, create cool virtual reality experiences, or launch new travel apps. The big question is: does going digital actually make a company a better conversationalist in the stock market?
This paper dives into that exact question, focusing on tourism companies in China—think of the big travel agencies, hotel chains, and theme park operators that are listed on the stock exchange. The authors, Chu Wang, Yunlai Zhang, and Yuyi Mao, decided to look at a very specific, high-stakes version of the town square: official stock exchange platforms called "Interactive Easy" and "SSE e-Interactive." Unlike social media apps like TikTok or Twitter where anyone can post anything, these platforms are like a strict, supervised classroom where investors ask questions and companies must answer them, or they get in trouble with the teachers (the regulators).
The researchers used a clever trick to measure how good the answers were. They didn't just read the answers to see if they sounded nice; they used a computer program (a type of artificial intelligence) to compare the "shape" of the investor's question with the "shape" of the company's answer. If the answer was a perfect fit—like a key sliding smoothly into a lock—the score was high. If the company gave a vague, evasive, or off-topic answer, the score was low. They then checked if companies that had done more "digital transformation" (measured by how often they talked about things like AI, big data, and the internet in their official reports) had higher scores.
Here is what they found: Yes, digital transformation really does help. The study suggests that when tourism companies embrace digital tools, they get much better at answering investor questions accurately. It's not magic, though; the paper explains how it works through three main paths. First, digital tools boost the company's technology level, giving them better gadgets to do the work. Second, it supercharges their information processing, meaning they can find the right facts faster and organize them better. Third, and perhaps most importantly, it boosts management confidence. When bosses feel they have the best data and tools at their fingertips, they are more confident in speaking up and sharing their plans clearly.
The paper also points out that this superpower isn't shared equally. The effect is strongest for state-owned companies (those owned by the government), profit-making companies (those actually making money), and emerging tourism companies (like those doing cool VR shows or digital art). Interestingly, for companies that are losing money, the digital boost wasn't as strong; it seems like if you're already in a financial hole, a fancy computer can't quite fix the confidence needed to talk to investors.
Finally, the researchers checked what happens after the company starts talking better. They found that when these tourism companies improve their communication, investors seem to like them more. This recognition actually helps the companies borrow money more easily, reducing the "financing constraints" that often hold them back. In short, the paper suggests that for tourism companies, going digital isn't just about making cool apps for tourists; it's about building a clear, confident voice that earns the trust of the people who fund their future. The study doesn't claim this solves every problem or works for every single company instantly, but the evidence strongly suggests that digital tools are a powerful way to turn a mumbled answer into a clear, trusted conversation.
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