Digital Finance and Financial Statement Comparability: Evidence from China

Digital Finance and Financial Statement Comparability: Evidence from China | Research Square window.SnipcartSettings = { analytics: { enabled: false } }; (function() { var accessVector = localStorage.getItem('access_vector') || ''; window.dataLayer = window.dataLayer || []; if (accessVector) { window.dataLayer.push({ user: { profile: { profileInfo: { snid: accessVector } } } }); } })(); (function(w,d,s,l,i){w[l]=w[l]||[];w[l].push({'gtm.start':new Date().getTime(),event:'gtm.js'});var f=d.getElementsByTagName(s)[0],j=d.createElement(s),dl=l!='dataLayer'?'&l='+l:'';j.async=true;j.src='https://www.googletagmanager.com/gtm.js?id='+i+dl;f.parentNode.insertBefore(j,f);})(window,document,'script','dataLayer','GTM-K279D39R'); Browse Preprints In Review Journals COVID-19 Preprints AJE Video Bytes Research Tools Research Promotion AJE Professional Editing AJE Rubriq About Preprint Platform In Review Editorial Policies Our Team Advisory Board Help Center Sign In Submit a Preprint Cite Share Download PDF Article Digital Finance and Financial Statement Comparability: Evidence from China Ahmad Nawaz Zaheer, Muhammad Anees Khan, Mazliham Bin Mohd Su'ud, and 2 more This is a preprint; it has not been peer reviewed by a journal. https://doi.org/ 10.21203/rs.3.rs-7103298/v1 This work is licensed under a CC BY 4.0 License Status: Posted Version 1 posted You are reading this latest preprint version Abstract Purpose: This study examines the relationship between digital finance and financial statement comparability. Design/methodology/approach: This study uses data from non-financial Chinese firms from 2011 to 2022. This study employs a pooled OLS regression method for hypothesis testing. However, the fixed effect model, two-stage least squares, and generalized method of moments are used to ensure the robustness of the results. Findings: This study finds that digital finance is positively associated with financial statement comparability. The relationship between digital finance and financial statement comparability is more pronounced in the presence of higher media coverage, analysts’ following, and in non-state-owned enterprises, but weaker when economic policy uncertainty is higher. The findings remain consistent with alternative measures of digital finance, omitted variables problems, and endogeneity issues. Practical implications: This study is expected to add significantly to the current literature in distinct ways: It supplements research on digital finance technology in firms with a different, micro-based approach and offers generalized evidence on the possible external governing role played by digital finance. Originality/value: While the benefits of digital finance, as well as the determinants of financial statement comparability, have been extensively studied in the literature, the effects of digital finance on financial statement comparability remain under-explored, especially in the context of a developing country with juggernaut development in digital finance, such as China. Business and commerce/Business and management Social science/Business and management Business and commerce/Economics Social science/Economics Business and commerce/Finance Social science/Finance Business and commerce/Information systems and information technology Physical sciences/Mathematics and computing digital finance financial statement comparability information asymmetry external governance mechanism JEL Classification M41 G41 Full Text Additional Declarations No competing interests reported. Tables 1 to 7 are available in the Supplementary Files section. Supplementary Files Tables.docx Cite Share Download PDF Status: Posted Version 1 posted You are reading this latest preprint version Research Square lets you share your work early, gain feedback from the community, and start making changes to your manuscript prior to peer review in a journal. As a division of Research Square Company, we’re committed to making research communication faster, fairer, and more useful. We do this by developing innovative software and high quality services for the global research community. Our growing team is made up of researchers and industry professionals working together to solve the most critical problems facing scientific publishing. Also discoverable on Platform About Our Team In Review Editorial Policies Advisory Board Help Center Resources Author Services Accessibility API Access RSS feed Manage Cookie Preferences © Research Square 2026 | ISSN 2693-5015 (online) Privacy Policy Terms of Service Do Not Sell My Personal Information {"props":{"pageProps":{"initialData":{"identity":"rs-7103298","acceptedTermsAndConditions":true,"allowDirectSubmit":true,"archivedVersions":[],"articleType":"Article","associatedPublications":[],"authors":[{"id":513311660,"identity":"422e0e5c-d8c7-4d0b-96aa-10b1811d1324","order_by":0,"name":"Ahmad Nawaz Zaheer","email":"","orcid":"","institution":"Jiangxi University of Technology","correspondingAuthor":false,"prefix":"","firstName":"Ahmad","middleName":"Nawaz","lastName":"Zaheer","suffix":""},{"id":513311661,"identity":"317e37d7-7f94-44f0-a6ec-9f3e9407de2c","order_by":1,"name":"Muhammad Anees Khan","email":"","orcid":"","institution":"Bahria University Islamabad","correspondingAuthor":false,"prefix":"","firstName":"Muhammad","middleName":"Anees","lastName":"Khan","suffix":""},{"id":513311662,"identity":"bc683806-1314-4aa3-b8a6-b3f250922cdd","order_by":2,"name":"Mazliham Bin Mohd Su'ud","email":"","orcid":"","institution":"Multimedia University","correspondingAuthor":false,"prefix":"","firstName":"Mazliham","middleName":"Bin Mohd","lastName":"Su'ud","suffix":""},{"id":513311663,"identity":"43b8769c-5e5f-4ec1-a093-e49808c32e9c","order_by":3,"name":"Irfan Ullah","email":"data:image/png;base64,iVBORw0KGgoAAAANSUhEUgAAAZAAAAAyAQMAAABI0h/eAAAABlBMVEX///8AAABVwtN+AAAACXBIWXMAAA7EAAAOxAGVKw4bAAABAklEQVRIiWNgGAWjYBACNgbGBwyMDSAmY/uHDzw2IEbjAfxamA1gWtoYZ8ikgRgNeLUwILQwsDHz2BwGs/Bq4ZM+zPi5cMfhPH7pw20PeHLO261tPwy0pcYmGqfD+JKZpWeeOVws2ZfYbiBx5nbytjOJQC3H0nIbcGnh4T8gzdt2OHHDGcYGCcOe28lmB4BaGBsO49HCzPwbpGU/SEviv3PJZucfEtTCBrGFh7FN4gDPATuzG4RtYbPmPZOeOOMMY7NhA09ygtkNoC0JePwi38PMfJt3h3Vifw/7w8d/eOzszc6nP3zwocYGpxYMkAhWmUCschCwJ0XxKBgFo2AUjAwAAG7oYBzAU+CLAAAAAElFTkSuQmCC","orcid":"","institution":"Jiangxi Normal University","correspondingAuthor":true,"prefix":"","firstName":"Irfan","middleName":"","lastName":"Ullah","suffix":""},{"id":513311664,"identity":"a631077b-ff7e-46ea-b4ba-6fa97185020b","order_by":4,"name":"Muhammad Arif Khan","email":"","orcid":"","institution":"Dalian Maritime University","correspondingAuthor":false,"prefix":"","firstName":"Muhammad","middleName":"Arif","lastName":"Khan","suffix":""}],"badges":[],"createdAt":"2025-07-11 16:08:21","currentVersionCode":1,"declarations":"","doi":"10.21203/rs.3.rs-7103298/v1","doiUrl":"https://doi.org/10.21203/rs.3.rs-7103298/v1","draftVersion":[],"editorialEvents":[],"editorialNote":"","failedWorkflow":false,"files":[{"id":96247263,"identity":"6a8f4614-d21a-4ce8-a97b-852e029fe682","added_by":"auto","created_at":"2025-11-19 07:27:19","extension":"pdf","order_by":1,"title":"","display":"","copyAsset":false,"role":"manuscript-pdf","size":535303,"visible":true,"origin":"","legend":"","description":"","filename":"BlindedManuscript.pdf","url":"https://assets-eu.researchsquare.com/files/rs-7103298/v1_covered_a0e0525f-0da6-4a46-8660-ecff6db7ad28.pdf"},{"id":91461036,"identity":"a194bf0b-aae8-40f3-9903-194dca99abe9","added_by":"auto","created_at":"2025-09-16 17:08:48","extension":"docx","order_by":0,"title":"","display":"","copyAsset":false,"role":"supplement","size":95784,"visible":true,"origin":"","legend":"","description":"","filename":"Tables.docx","url":"https://assets-eu.researchsquare.com/files/rs-7103298/v1/4538741e97b52bc090b941ae.docx"}],"financialInterests":"\u003cp\u003eNo competing interests reported.\u003c/p\u003e\n\u003cp\u003eTables 1 to 7 are available in the Supplementary Files section.\u003c/p\u003e","formattedTitle":"Digital Finance and Financial Statement Comparability: Evidence from China","fulltext":[],"fulltextSource":"","fullText":"","funders":[],"hasAdminPriorityOnWorkflow":false,"hasManuscriptDocX":false,"hasOptedInToPreprint":true,"hasPassedJournalQc":"","hasAnyPriority":false,"hideJournal":true,"highlight":"","institution":"","isAcceptedByJournal":false,"isAuthorSuppliedPdf":true,"isDeskRejected":"","isHiddenFromSearch":false,"isInQc":false,"isInWorkflow":false,"isPdf":true,"isPdfUpToDate":true,"isWithdrawnOrRetracted":false,"journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true},"keywords":"digital finance, financial statement comparability, information asymmetry, external governance mechanism JEL Classification, M41, G41","lastPublishedDoi":"10.21203/rs.3.rs-7103298/v1","lastPublishedDoiUrl":"https://doi.org/10.21203/rs.3.rs-7103298/v1","license":{"name":"CC BY 4.0","url":"https://creativecommons.org/licenses/by/4.0/"},"manuscriptAbstract":"\u003cp\u003e\u003cstrong\u003ePurpose:\u003c/strong\u003e This study examines the relationship between digital finance and financial statement comparability.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eDesign/methodology/approach:\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis study uses data from non-financial Chinese firms from 2011 to 2022. This study employs a pooled OLS regression method for hypothesis testing. However, the fixed effect model, two-stage least squares, and generalized method of moments are used to ensure the robustness of the results.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eFindings:\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis study finds that digital finance is positively associated with financial statement comparability. The relationship between digital finance and financial statement comparability is more pronounced in the presence of higher media coverage, analysts’ following, and in non-state-owned enterprises, but weaker when economic policy uncertainty is higher. The findings remain consistent with alternative measures of digital finance, omitted variables problems, and endogeneity issues.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003ePractical implications:\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eThis study is expected to add significantly to the current literature in distinct ways: It supplements research on digital finance technology in firms with a different, micro-based approach and offers generalized evidence on the possible external governing role played by digital finance.\u003c/p\u003e\n\u003cp\u003e\u003cstrong\u003eOriginality/value:\u003c/strong\u003e\u003c/p\u003e\n\u003cp\u003eWhile the benefits of digital finance, as well as the determinants of financial statement comparability, have been extensively studied in the literature, the effects of digital finance on financial statement comparability remain under-explored, especially in the context of a developing country with juggernaut development in digital finance, such as China.\u003c/p\u003e","manuscriptTitle":"Digital Finance and Financial Statement Comparability: Evidence from China","msid":"","msnumber":"","nonDraftVersions":[{"code":1,"date":"2025-09-16 17:08:44","doi":"10.21203/rs.3.rs-7103298/v1","editorialEvents":[{"type":"communityComments","content":0}],"status":"published","journal":{"display":true,"email":"[email protected]","identity":"researchsquare","isNatureJournal":false,"hasQc":true,"allowDirectSubmit":true,"externalIdentity":"","sideBox":"","snPcode":"","submissionUrl":"/submission","title":"Research Square","twitterHandle":"researchsquare","acdcEnabled":true,"dfaEnabled":false,"editorialSystem":"","reportingPortfolio":"","inReviewEnabled":false,"inReviewRevisionsEnabled":true}}],"origin":"","ownerIdentity":"7b537074-bdf3-4088-be11-868093456321","owner":[],"postedDate":"September 16th, 2025","published":true,"recentEditorialEvents":[],"rejectedJournal":[],"revision":"","amendment":"","status":"posted","subjectAreas":[{"id":54532641,"name":"Business and commerce/Business and management"},{"id":54532642,"name":"Social science/Business and management"},{"id":54532643,"name":"Business and commerce/Economics"},{"id":54532644,"name":"Social science/Economics"},{"id":54532645,"name":"Business and commerce/Finance"},{"id":54532646,"name":"Social science/Finance"},{"id":54532647,"name":"Business and commerce/Information systems and information technology"},{"id":54532648,"name":"Physical sciences/Mathematics and computing"}],"tags":[],"updatedAt":"2025-11-16T17:38:34+00:00","versionOfRecord":[],"versionCreatedAt":"2025-09-16 17:08:44","video":"","vorDoi":"","vorDoiUrl":"","workflowStages":[]},"version":"v1","identity":"rs-7103298","journalConfig":"researchsquare"},"__N_SSP":true},"page":"/article/[identity]/[[...version]]","query":{"redirect":"/article/rs-7103298","identity":"rs-7103298","version":["v1"]},"buildId":"8U1c8b4HqxoKbykW_rLl7","isFallback":false,"isExperimentalCompile":false,"dynamicIds":[84888],"gssp":true,"scriptLoader":[]}