The Impact of Digital Transformation on Information Asymmetry: Evidence from Saudi Listed Companies

Study Objective: This study amis to investigate the impact of digital transformation in reducing information asymmetry in Saudi Securities Exchange Listed Companies.
Study methodology: To achieve the objectives of the study, the researcher collected data from a sample of the top (50) Companies, Listed in (TASI) Index for the year 2020. Multiple correlation analysis and multiple regression analysis were used to investigate the effect of the adoption of digital transformation on information asymmetry in the Saudi stock market.
Findings: The results of multiple correlation analysis show that the adoption of digital transformation is significantly and negatively related to information asymmetry in the sample companies. A hidher level of digital transformation may lead to lower of information asymmetry.
The results of multiple regression analysis also confirm the existence of a negative relationship between the level of digital transformation and the Bid-Ask spread as a proxy of information asymmetry. The higher the level of digital transformation, the lower the level of information asymmetry. The regression coefficient for digital transformation adoption is - 0.008453, and this is significantly related to information asymmetry (P-value = 0.026). 
Multiple regression analysis also shows that the regression model explains 56% of the difference in the relative Bid-Ask spread (R²=0.5639998). Hence, the results of multiple regression support that adopting digital transformation reduces information asymmetry in the Saudi stock market, which was measured by the relative Bid-Ask spread, which supports the main hypothesis of the study.