The impact of artificial intelligence (AI) finance on financing constraints of non-SOE firms in emerging markets

Jun Shao, Zhukun Lou, Chong Wang, Jinye Mao and Ailin Ye

International Journal of Emerging Markets, 2021, vol. 17, issue 4, 930-944

Abstract: Purpose - This study investigates the impact of AI finance on financing constraints of non-SOE firms in an emerging market. Design/methodology/approach - Using a sample of non-SOE listed companies in China from 2011 to 2018, this research employs the cash–cash flow sensitivity model to examine the effect of AI finance on financing constraints of non-SOE firms. Findings - We find that the development of AI finance can alleviate the financing constraints of non-SOE firms. Further, we document that such effect is more pronounced for smaller firms, more innovative firms and firms in developing areas. Practical implications - This study suggests that emerging market countries can ease the financing constraints of non-SOE firms by promoting AI finance development. Originality/value - This study, to the best of our knowledge, is the first one to explore the relationship between AI finance development and financing constraints of non-SOE firms in emerging markets.

Keywords: AI finance; Financing constraints; Non-SOE firms (search for similar items in EconPapers)
Date: 2021
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Persistent link: https://EconPapers.repec.org/RePEc:eme:ijoemp:ijoem-02-2021-0299

DOI: 10.1108/IJOEM-02-2021-0299

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