Does technology innovation in finance alleviate financing constraints and reduce debt-financing costs? Evidence from China

By Hang Chen, S. Yoon. Asia Pacific Business Review, 2021

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ABSTRACT We use Chinese listed firms from 2011 to 2018 to explore whether and how financial technology impacts corporate debt-financing constraints and costs. Using two forms of financial technology cases in China, we explain why technology innovation in the financial industry flourishes and contributes to alleviating debt-financing constraints and reducing debt-financing costs. We empirically document that financial technology helps alleviate firms’ financing constraints and reduce firms’ debt-financing costs. We also find that financial technology plays a more significant role for private-owned firms, small firms, growth-stage firms, and firms under intense financial supervision.

Subfields: Accounting, Economics and Econometrics, Management Information Systems

View Paper: https://www.semanticscholar.org/paper/6169acce6c3a6b0cdc0084d8a72959ef7175b5b5