Does digital transformation of enterprises help reduce the cost of equity capital

Digital economy is regarded as the main economic form following agricultural economy and industrial economy. And the digital transformation has given enterprises new development momentum. Can it reduce the equity capital cost? This paper uses text analysis obtained by crawling the annual reports from 2010 to 2021 and investigates the impact of digital transformation on the corporate equity capital cost. The results show that: 1) Digital transformation will reduce the equity capital cost; 2) The digital transformation has a heterogeneous impact on the equity capital cost of enterprises with different scales, natures and levels of leverage, which is more significant for large-scale enterprises, state-owned enterprises and highly leveraged enterprises; 3) Digital transformation mainly affects the equity capital cost by improving enterprise value, rather than by increasing analysts' attention and influencing the level of corporate risk bearing.