Digital finance and dividend policy: Evidence from China

Yunxing Song, Suin Lee and Bin Wang

Pacific-Basin Finance Journal, 2025, vol. 90, issue C

Abstract: This study investigates the effect of digital finance on dividend payouts. Using the digital finance index from PKU-DFICC and a sample of Chinese listed firms, we find a positive relation between digital finance and dividend payouts. Supporting our hypothesis that digital finance reduces information asymmetry and increases insiders' incentive to pay out dividends, the positive relation is stronger for firms with severe information asymmetry. Additionally, digital finance's role in reducing financing constraints also promotes dividend payouts. Overall, our findings suggest noteworthy implications of digital finance on financial markets via dividend payout policy.

Keywords: Digital finance; Dividend; Information asymmetry; Financing constraints (search for similar items in EconPapers)
JEL-codes: G15 G35 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:pacfin:v:90:y:2025:i:c:s0927538x25000411

DOI: 10.1016/j.pacfin.2025.102704

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