Does digital finance impact debt concentration of Chinese firms?. Issue 7 (16th April 2023)

• Record Type: Journal Article
• Authors: Chen, Caiyun; Li, Minghuan
• Is Part Of: Applied economics letters. Volume 30:Issue 7(2023)
• Page Start: 871
• Page End: 874
• Publication Date: 2023-04-16
• Subjects: Digital finance -- debt concentration -- debt types -- negotiation; D21 -- M41 -- G32; Economics -- Periodicals; Economics, Mathematical -- Periodicals; 330
• DOI: 10.1080/13504851.2022.2027330
• Languages: English
• ISSNs: 1350-4851

Abstract

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.