From Words to Actions: Can Companies Hear the Digital Voices of Retail Investors?

Driven by national policy advocacy and the investment value of digital transformation, retail investors’ attention to companies’ digital transformation has been growing. This paper uses a deep learning model to identify investors’ digitalization-related questions on interactive platforms and examines the impact of these demands on companies’ digital transformation from the perspectives of “words” and “actions.” The results show that retail investors’ digital demands prompt companies to make commitments and take actions toward digital transformation. Mechanism tests reveal that retail investors’ digital demands enhance management’s emphasis, and create reputational and regulatory pressures, thereby facilitating companies’ digital transformation. Heterogeneity analysis shows that the driving effect is influenced by the investor’s demand intensity, management’s responsiveness, and the company’s internal conditions. When investors’ demands are more professional and concentrated, management responses are more adequate and timely, and the internal environment and resource availability are more favorable, companies’ digital transformation is better promoted. This paper provides new perspectives and empirical evidence on how retail investors can gain a voice and actively exert governance influence on corporate long-term practices in the digital era.