Digital finance and corporate credit rent-seeking: The role of financing constraints and bank competition

Wenjing Xiong, Wenhua Liu and Fenghua Wen

Pacific-Basin Finance Journal, 2025, vol. 92, issue C

Abstract: This study uses firm-level data from Chinese companies spanning 2012 to 2021 to investigate the influence of digital finance on corporate credit rent-seeking activities. Our analysis shows that the evolution of digital finance restricts corporate credit rent-seeking activities. Specifically, digital finance mitigates corporate credit rent-seeking activities by alleviating financing constraints and intensifying competition among banks. Furthermore, the restrictive impact is more pronounced for non-state firms and firms with lower analyst attention. We also find that the mitigating effect of digital finance on corporate credit rent-seeking activities is more substantial in provinces with higher levels of financial supervision expenditures. These findings offer insights for the government to enhance financial regulation and promote the rational allocation of financial resources.

Keywords: Digital finance; Credit rent-seeking; Financing constrains; Bank competition; Information asymmetry (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:92:y:2025:i:c:s0927538x25001155

DOI: 10.1016/j.pacfin.2025.102778

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