IDEAS home Printed from https://ideas.repec.org/a/bba/j00005/v2y2024i1p18-37d284.html
   My bibliography  Save this article

Has the development of the digital economy increased corporate financial asset holdings? --A quasi-natural experiment based on the "Broadband China" policy

Author

Listed:
  • Xiuhai Huang

    (School of Data Sciences, Zhejiang University of Finance and Economics, Hangzhou, China)

  • Zhenyu Xu

    (School of Data Sciences, Zhejiang University of Finance and Economics, Hangzhou, China)

Abstract

A differences-in-differences (DID) model and financial data from Chinese listed firms from 2011 to 2019 are used to empirically investigate the effects of the digital economy on corporate financial asset holdings using the "Broadband China" policy as a quasi-natural experiment. After robustness testing and heterogeneity effects are disposed of, the digital economy dramatically boosts corporate financial asset holdings. According to the channel analysis, the digital economy can reduce corporate financing constraints and boost corporate financial asset holdings, notably based on speculative demand. Heterogeneity analysis shows that the digital economy has a greater impact on corporate financial asset holdings for firms with higher market competition, small-scale firms with a short-listed age, and firms in the western region. This paper provides policy guidance for enterprises returning to the real economy.

Suggested Citation

  • Xiuhai Huang & Zhenyu Xu, 2024. "Has the development of the digital economy increased corporate financial asset holdings? --A quasi-natural experiment based on the "Broadband China" policy," Journal of Economic Statistics, Anser Press, vol. 2(1), pages 18-37, January.
    • Handle: RePEc:bba:j00005:v:2:y:2024:i:1:p:18-37:d:284
    as

    Download full text from publisher

    File URL: https://www.anserpress.org/journal/jes/2/1/17/pdf
    Download Restriction: no
    File URL: https://www.anserpress.org/journal/jes/2/1/17
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Yingyuan Liu & Dandan Jin & Yuemin Liu & Qian Wan, 2023. "RETRACTED ARTICLE: Digital finance, corporate financialization and enterprise operating performance: an empirical research based on Chinese A-share non-financial enterprises," Electronic Commerce Research, Springer, vol. 23(1), pages 231-256, March.
    2. Heitor Almeida & Murillo Campello & Igor Cunha & Michael S. Weisbach, 2014. "Corporate Liquidity Management: A Conceptual Framework and Survey," Annual Review of Financial Economics, Annual Reviews, vol. 6(1), pages 135-162, December.
    3. Ozgür Orhangazi, 2008. "Financialisation and capital accumulation in the non-financial corporate sector:," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 32(6), pages 863-886, November.
    4. Zhang, Ziqi & Su, Zhi & Tong, Fang, 2023. "Does digital transformation restrain corporate financialization? Evidence from China," Finance Research Letters, Elsevier, vol. 56(C).
    5. Li, Chengming & Wang, Yilin & Zhou, Zhihan & Wang, Zeyu & Mardani, Abbas, 2023. "Digital finance and enterprise financing constraints: Structural characteristics and mechanism identification," Journal of Business Research, Elsevier, vol. 165(C).
    6. Yang, Jinghao & Chen, Siyu, 2023. "Corporate financialization, digitalization and green innovation: A panel investigation on Chinese listed firms," Innovation and Green Development, Elsevier, vol. 2(3).
    7. Sutherland, Andrew, 2018. "Does credit reporting lead to a decline in relationship lending? Evidence from information sharing technology," Journal of Accounting and Economics, Elsevier, vol. 66(1), pages 123-141.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. repec:bba:j00005:v:2:y:2024:i:1:p:19-38:d:284 is not listed on IDEAS
    2. Huang, Yong & Yan, Chao & Chan, Kam C., 2022. "Does the truth rest with the minority? Divergent views on nonfinancial firms' financial investments from the private equity market," International Review of Financial Analysis, Elsevier, vol. 83(C).
    3. Jiang, Pengcheng & Jiang, Hongli & Wu, Jiahui, 2022. "Is inhibition of financialization the sub-effect of the green credit policy? Evidence from China," Finance Research Letters, Elsevier, vol. 47(PB).
    4. Photis Lysandrou, 2016. "The colonization of the future: An alternative view of financialization and its portents," Journal of Post Keynesian Economics, Taylor & Francis Journals, vol. 39(4), pages 444-472, October.
    5. Nicolas Piluso, 2025. "Tobin's Q and shareholder value: Does “shareholder return” impede investment?," Review of Financial Economics, John Wiley & Sons, vol. 43(1), pages 3-7, January.
    6. Robin Döttling & Tomislav Ladika & Enrico Perotti, 2016. "The (Self-)Funding of Intangibles," Tinbergen Institute Discussion Papers 16-093/IV, Tinbergen Institute.
    7. Costello, Anna M. & Down, Andrea K. & Mehta, Mihir N., 2020. "Machine + man: A field experiment on the role of discretion in augmenting AI-based lending models," Journal of Accounting and Economics, Elsevier, vol. 70(2).
    8. Valentina Bruno & Hyun Song Shin, 2017. "Global Dollar Credit and Carry Trades: A Firm-Level Analysis," The Review of Financial Studies, Society for Financial Studies, vol. 30(3), pages 703-749.
    9. Michalis Nikiforos, 2020. "Demand, Distribution, Productivity, Structural Change, and (Secular?) Stagnation," Economics Working Paper Archive wp_945, Levy Economics Institute.
    10. Susan Newman, 2014. "Financialisation and the Financial and Economic Crises: The Case of South Africa," FESSUD studies fstudy26, Financialisation, Economy, Society & Sustainable Development (FESSUD) Project.
    11. Eckhard Hein & Christian Schoder, 2011. "Interest rates, distribution and capital accumulation -- A post-Kaleckian perspective on the US and Germany," International Review of Applied Economics, Taylor & Francis Journals, vol. 25(6), pages 693-723, November.
    12. Dögüs, Ilhan, 2016. "A Minskyan criticism on the shareholder pressure approach of financialisation," ZÖSS-Discussion Papers 53, University of Hamburg, Centre for Economic and Sociological Studies (CESS/ZÖSS).
    13. Almaghrabi, Khadija S., 2023. "Non‐operating risk and cash holdings: Evidence from pension risk," Journal of Banking & Finance, Elsevier, vol. 152(C).
    14. Erel, Isil & Jang, Yeejin & Minton, Bernadette A. & Weisbach, Michael S., 2021. "Corporate Liquidity, Acquisitions, and Macroeconomic Conditions," Journal of Financial and Quantitative Analysis, Cambridge University Press, vol. 56(2), pages 443-474, March.
    15. Li, Chengming & Wang, Yilin & Zhou, Zhihan & Wang, Zeyu & Mardani, Abbas, 2023. "Digital finance and enterprise financing constraints: Structural characteristics and mechanism identification," Journal of Business Research, Elsevier, vol. 165(C).
    16. Ding, Jiantao & Yin, Yingkai & Kuang, Jinsong & Ding, Dezhi & Madsen, Dag.Øivind & Yang, Kunyu, 2024. "The impact of enterprise digital transformation on financial mismatch: Empirical evidence from listed companies in China," Finance Research Letters, Elsevier, vol. 66(C).
    17. Joel Rabinovich & Niall Reddy, 2024. "Corporate Financialization: A Conceptual Clarification and Critical Review of the Literature," Working Papers PKWP2402, Post Keynesian Economics Society (PKES).
    18. Shimano, Norihito, 2017. "The effect of pro-shareholder income distribution on capital accumulation: evidence from Japanese non-financial firms," MPRA Paper 76830, University Library of Munich, Germany.
    19. Jiamin Liu & Xiaoyu Ma & Bin Zhao & Qi Cui & Sisi Zhang & Jiaoning Zhang, 2023. "Mandatory Environmental Regulation, Enterprise Labor Demand and Green Innovation Transformation: A Quasi-Experiment from China’s New Environmental Protection Law," Sustainability, MDPI, vol. 15(14), pages 1-31, July.
    20. Xiao Li & Jeffrey Ng & Walid Saffar, 2021. "Financial Reporting and Trade Credit: Evidence from Mandatory IFRS Adoption," Contemporary Accounting Research, John Wiley & Sons, vol. 38(1), pages 96-128, March.
    21. Quoc Trung Tran, 2020. "Corporate cash holdings and financial crisis: new evidence from an emerging market," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 10(2), pages 271-285, June.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bba:j00005:v:2:y:2024:i:1:p:18-37:d:284. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ramona Wang (email available below). General contact details of provider: https://www.anserpress.org .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.