  The contrast between companies' "fleshy" promises and the "skeletal"
performance in digital transformation may lead to a higher risk of stock price
crash. This paper selects a sample of Shanghai and Shenzhen A-share listed
companies from 2010 to 2021, empirically analyses the specific impact of the
gap between words and deeds in digital transformation (GDT) on the stock price
crash risk, and explores the possible causes of GDT. We found that GDT
significantly increases the stock price crash risk, and this finding is still
valid after a series of robustness tests. In a further study, a deeper
examination of the causes of GDT reveals that firms' perceptions of economic
policy uncertainty significantly increase GDT, and the effect is more
pronounced in the sample of loss-making firms. At the same time, the results of
the heterogeneity test suggest that investors are more tolerant of state-owned
enterprises when they are in the GDT situation. Taken together, we provide a
concrete bridge between the two measures of digital transformation - digital
text frequency and digital technology share - and offer new insights to enhance
capital market stability.
