Abstract: Digital transformation gives enterprises new development momentum and digital supervision opportunities. Then, is digital transformation conducive to the suppression of controlling shareholders’ tunneling behavior? Taking China’s A-share listed companies in Shanghai and Shenzhen stock exchanges from 2011 to 2020 as samples, this paper investigates the impact of enterprises digital transformation on controlling shareholders’ tunneling behavior. The findings show that enterprises digital transformation can significantly inhibit the tunneling behavior of controlling shareholders. The mechanism test shows that this inhibiting effect of digital transformation on controlling shareholders’ tunneling behavior is achieved mainly by strengthening the effectiveness of corporate internal control and improving the market information environment. Further tests reveal that the inhibiting effect of digital transformation on controlling shareholders’ tunneling behavior is more significant in the enterprises with weak equity balance, the high-tech enterprises and the enterprises located in the regions with poor legal supervision. Therefore, it is necessary to effectively promote the corporate digital transformation, so as to prevent the controlling shareholders from encroaching the interests of the medium and small shareholders.

Key words: enterprises digital transformation, the tunneling behavior of controlling shareholders, check-and-balance of ownership