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Corporate resilience to the COVID-19 pandemic: The role of digital finance

Yanchun Xia, Zhilin Qiao and Guanghua Xie

Pacific-Basin Finance Journal, 2022, vol. 74, issue C

Abstract: This paper studies the role of digital finance in shaping corporate resilience to the COVID-19 pandemic by analyzing the stock prices of Chinese listed firms. We find that firms located in regions with higher levels of digital finance experience fewer losses and recover more quickly from the COVID-19 pandemic. Further analysis shows that digital finance helps build corporate resilience by facilitating firms' access to external financing and reducing financing costs. We further document that the positive effects of digital finance on corporate resilience are more pronounced for small firms, non-state-owned enterprises, and low cash holding firms. Overall, these findings suggest that digital finance improves corporate resilience by mitigating financing frictions.

Keywords: Digital finance; Corporate resilience; Financing frictions; The COVID-19 pandemic (search for similar items in EconPapers)
JEL-codes: G30 G34 J16 (search for similar items in EconPapers)
Date: 2022
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:74:y:2022:i:c:s0927538x22000865

DOI: 10.1016/j.pacfin.2022.101791

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