IDEAS home Printed from https://ideas.repec.org/a/eee/ecmode/v132y2024ics0264999323004443.html
   My bibliography  Save this article

Can enterprise digital transformation reduce the reliance on bank credit? Evidence from China

Author

Listed:
  • Chen, Ximing
  • Yan, Yongjia
  • Qiu, Ji

Abstract

Academics are inconclusive on whether enterprises' digital transformation can reduce their reliance on bank credit. We examine this question using a Chinese sample of 2325 A-share-listed companies from 2007 to 2021, finding a significant negative correlation between a firm's digital transformation and reliance on bank credit; the results remain robust after a series of endogeneity tests. Digital transformation alleviates bank credit dependence mainly by easing firms' financing constraints and reducing information asymmetry. Specifically, the alleviation effect of enterprise digital transformation is stronger among enterprises with private ownership and smaller asset sizes. In addition to the nature of firms, increased competition in the banking sector and a favorable business environment contribute to curtailing bank credit dependence. This paper's findings point to companies' digital transformation agenda, confirming that financial development supports economic growth.

Suggested Citation

  • Chen, Ximing & Yan, Yongjia & Qiu, Ji, 2024. "Can enterprise digital transformation reduce the reliance on bank credit? Evidence from China," Economic Modelling, Elsevier, vol. 132(C).
    • Handle: RePEc:eee:ecmode:v:132:y:2024:i:c:s0264999323004443
    DOI: 10.1016/j.econmod.2023.106632
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264999323004443
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econmod.2023.106632?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Keywords

    Enterprise digital transformation; Bank credit dependency; Financing constraints; Information asymmetry;
    All these keywords.

    JEL classification:

    • G23 - Financial Economics - - Financial Institutions and Services - - - Non-bank Financial Institutions; Financial Instruments; Institutional Investors
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecmode:v:132:y:2024:i:c:s0264999323004443. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/30411 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.