Digital transformation whitewashing and financing constraints

Yaxin Feng, Yanhong Li and Tiantian Lin

Finance Research Letters, 2024, vol. 69, issue PB

Abstract: This study investigates the drivers and consequences of digital transformation whitewashing (DTW) among Chinese manufacturing firms from 2010 to 2021. We find that financing constraints have a robust and significant positive impact on DTW, an effect that is more pronounced for firms located in provinces with lower marketization or operating in industries with lower levels of monopoly. Regarding economic consequences, our results indicate that DTW fails to alleviate external financing constraints, instead causing firms to increasingly rely on internal financing.

Keywords: Digital transformation whitewashing; Financing constraints; Internal financing; External financing (search for similar items in EconPapers)
JEL-codes: D82 G30 G32 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012716

DOI: 10.1016/j.frl.2024.106242

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