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Supply-chain finance digitalization and corporate financial fraud: Evidence from China

Author

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  • Jiang, Hui
  • Peng, Cheng
  • Ren, Daling

Abstract

Recently, supply chain finance (SCF) digitalization, which integrates emerging digital technologies with traditional SCF, has been attracting worldwide attention. While previous studies have highlighted the adoption of SCF digitalization, little is known about how it shapes corporate behaviors. Using a sample of Chinese A-listed firms from 2008 to 2021, this study investigates the relationship between SCF digitalization and corporate financial fraud. Based on the results of the propensity score matching and difference-in-differences approach and mechanism analysis, SCF digitalization is found to inhibit corporate financial fraud by reducing a firm's relational transactions with its suppliers and customers. Additionally, cross-sectional analysis reveals that the governance effect is more pronounced for small- and medium-sized enterprises and for companies with higher information asymmetry, more financial linkages, and lower financial flexibility. Overall, our findings facilitate the understanding of how the digital economy influences corporate behaviors.

Suggested Citation

  • Jiang, Hui & Peng, Cheng & Ren, Daling, 2024. "Supply-chain finance digitalization and corporate financial fraud: Evidence from China," Economic Modelling, Elsevier, vol. 139(C).
    • Handle: RePEc:eee:ecmode:v:139:y:2024:i:c:s0264999324001949
    DOI: 10.1016/j.econmod.2024.106837
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    More about this item

    Keywords

    Supply chain finance digitalization; Relational transactions; Financial fraud; Quasi-natural experiment approach; Difference-in-differences model;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • M41 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Accounting - - - Accounting

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