## The Impact of Enterprise Digital Transformation on Informed Trading### Abstract**Background:** Informed trading, driven by information asymmetry and market imperfections, varies in presence across markets. This form of trading not only distorts market transaction prices and hinders resource allocation but also initiates adverse selection transactions, increasing liquidity risks and potentially precipitating market crashes, thereby impeding the market's healthy development. Utilizing information asymmetry theory and principal-agent theory, this paper analyzes data from A-share listed companies from 2011 to 2022. Employing a fixed-effect model, it empirically examines the influence of enterprise digital transformation on the likelihood of informed trading. The findings demonstrate that enterprise digital transformation markedly reduces the likelihood of informed trading.**Methods:** A fixed-effects model is used to examine the influence of enterprise digital transformation on the likelihood of informed trading.**Results:*** The regression results indicate that enterprise digital transformation significantly reduces the likelihood of informed trading.* Enterprise digital transformation enhances the information transparency of the enterprise, which in turn strengthens the enterprise's internal control capabilities and reduces the probability of informed trading.* Digital transformation can only significantly inhibit the informed transactions when enterprises have reached a certain level of technological and asset accumulation.### Conclusion**Implications:*** The promotion of digital transformation of enterprises, particularly in non-state-owned and high-tech enterprises and enterprises in developed regions.* The balanced development of inter-regional digital infrastructure.* Enhancing enterprise internal control and the information disclosure system.* Implementing differentiated digital transformation strategies for enterprises of varying sizes and development stages.### Limitations and Future Research Directions**Limitations:*** The study sample is mainly focused on the Chinese market, which may not fully capture the global diversity of digital transformation and its impact on informed trading.* The study primarily focuses on the relationship between digital transformation and informed trading behavior without considering other potential factors that may influence this behavior.**Future Research Directions:*** Conduct a cross-cultural study to examine the impact of digital transformation on informed trading in different global markets.* Explore the dynamic and evolving nature of digital transformation and its long-term effects on informed trading behavior.* Investigate the impact of different facets of digital transformation, such as data analytics, cloud computing, and artificial intelligence, on informed trading.