Does digital finance impact debt concentration of Chinese firms?

Caiyun Chen and Minghuan Li

Applied Economics Letters, 2023, vol. 30, issue 7, 871-874

Abstract: We investigate the relation between digital finance and debt concentration in capital structures of firms. Measuring digital finance with a comprehensive index, we show that digital finance is indeed related to more concentrated debt structures of firms. Turning to the sub-indices of digital finance, coverage breadth and usage depth of digital finance increase firms’ debt concentration, while digitization degree is not a central concern for firms. The link between digital finance and debt concentration is stronger for companies with high level of information asymmetry and high default risk.

Date: 2023
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DOI: 10.1080/13504851.2022.2027330

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