Fintech and dynamic adjustment of capital structure

Ruogu Zhou and Jialing Li

Finance Research Letters, 2024, vol. 67, issue PA

Abstract: The rapid advancement of financial technology (Fintech) has notably alleviated the information asymmetry challenges faced by firms in the financial market. Drawing upon a comprehensive sample of listed firms in China, we find that Fintech speeds up the adjustment towards the target capital structure, and this acceleration derives from improved information transparency, alleviated financing constraint, and heightened bank competition. We also find that Fintech has a more significantly positive impact on capital structure adjustment among firms with lower agency costs. Moreover, when capital structure is higher the target and the firm is in high-competition industry, the adjustment occurs more promptly.

Keywords: Fintech; Capital structure; Information asymmetry; Technology development (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:67:y:2024:i:pa:s1544612324008833

DOI: 10.1016/j.frl.2024.105853

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