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Regional Digital Finance and Corporate Financial Risk: Based on Chinese Listed Companies

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  • Dai Yuhui
  • Lu Zhang

Abstract

Using digital inclusive finance data from Peking University, this paper empirically examines the relationship between regional digital finance development and the financial risk of listed companies. The mechanism test finds that digital finance development can significantly reduce corporate financial risk. Digital finance has a resource effect and governance effect, reducing corporate financial risk by alleviating corporate financing constraints and reducing inefficient investment. Heterogeneity tests show that the reduction effect of digital finance on corporate financial risk is more significant in SMEs, private firms, and firms with non-overconfident managers.

Suggested Citation

  • Dai Yuhui & Lu Zhang, 2023. "Regional Digital Finance and Corporate Financial Risk: Based on Chinese Listed Companies," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 59(2), pages 296-311, January.
    • Handle: RePEc:mes:emfitr:v:59:y:2023:i:2:p:296-311
    DOI: 10.1080/1540496X.2022.2099268
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    Cited by:

    1. Wang, Kaike & Zhang, Xin & Wang, Shuhong, 2024. "Blockchain technology concerns and corporate financial risk prevention—A quasi-natural experiment for Chinese listed A-share companies," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 1496-1512.
    2. Adi GUNANTO, 2023. "Mitigating Financial Distress: Analysis of Financial Indicators for Startup Companies in Indonesia," CECCAR Business Review, Body of Expert and Licensed Accountants of Romania (CECCAR), vol. 4(10), pages 49-59, October.
    3. Hongqin Tang & Jianping Zhu & Nan Li & Weipeng Wu, 2024. "Impact of Enterprise Supply Chain Digitalization on Cost of Debt: A Four-Flows Perspective Analysis Using Explainable Machine Learning Methodology," Sustainability, MDPI, vol. 16(19), pages 1-27, October.
    4. Zhu, Changchun & Li, Na & Ma, Jing, 2024. "Impact of CEO overconfidence on enterprise digital transformation: Moderating effect based on digital finance," Finance Research Letters, Elsevier, vol. 59(C).
    5. Chengyun Liu & Ziting Zhou & Kun Su & Ke Liu & Hui An, 2024. "Water risk and financial analysts' information environment: Empirical evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 33(2), pages 1265-1304, February.
    6. Ding, Guangyuan & Li, Zhenzu & Shen, Hebin, 2024. "Digital finance and enterprise trade and investment: The moderating effect of CEO characteristics," Finance Research Letters, Elsevier, vol. 64(C).

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