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Corporate resilience to the COVID-19 pandemic: The role of digital finance

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  • Xia, Yanchun
  • Qiao, Zhilin
  • Xie, Guanghua

Abstract

This paper studies the role of digital finance in shaping corporate resilience to the COVID-19 pandemic by analyzing the stock prices of Chinese listed firms. We find that firms located in regions with higher levels of digital finance experience fewer losses and recover more quickly from the COVID-19 pandemic. Further analysis shows that digital finance helps build corporate resilience by facilitating firms' access to external financing and reducing financing costs. We further document that the positive effects of digital finance on corporate resilience are more pronounced for small firms, non-state-owned enterprises, and low cash holding firms. Overall, these findings suggest that digital finance improves corporate resilience by mitigating financing frictions.

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  • Xia, Yanchun & Qiao, Zhilin & Xie, Guanghua, 2022. "Corporate resilience to the COVID-19 pandemic: The role of digital finance," Pacific-Basin Finance Journal, Elsevier, vol. 74(C).
    • Handle: RePEc:eee:pacfin:v:74:y:2022:i:c:s0927538x22000865
    DOI: 10.1016/j.pacfin.2022.101791
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    4. Razzaq, Asif & Yang, Xiaodong, 2023. "Digital finance and green growth in China: Appraising inclusive digital finance using web crawler technology and big data," Technological Forecasting and Social Change, Elsevier, vol. 188(C).
    5. Ying Tian & Jiayi Hong, 2022. "In the Context of Digital Finance, Can Knowledge Enable Manufacturing Companies to Be More Courageous and Move towards Sustainable Innovation?," Sustainability, MDPI, vol. 14(17), pages 1-24, August.
    6. Bedford, Anna & Bugeja, Martin & Ghannam, Samir & Jeganathan, Davina & Ma, Nelson, 2023. "Were CEO pay cuts during the COVID-19 pandemic merely symbolic? Shareholders' reaction and outrage," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    7. Schipor Frecea Georgiana-Loredana & Duhnea Cristina, 2023. "The Influence of the COVID-19 Pandemic on the CSR Practices in the Romanian Banking Sector," Proceedings of the International Conference on Business Excellence, Sciendo, vol. 17(1), pages 2025-2035, July.
    8. Inese Mavlutova & Aivars Spilbergs & Atis Verdenhofs & Andris Natrins & Ilja Arefjevs & Tatjana Volkova, 2022. "Digital Transformation as a Driver of the Financial Sector Sustainable Development: An Impact on Financial Inclusion and Operational Efficiency," Sustainability, MDPI, vol. 15(1), pages 1-24, December.
    9. Du, Yanan & Wang, Qingxi & Zhou, Jianping, 2023. "How does digital inclusive finance affect economic resilience: Evidence from 285 cities in China," International Review of Financial Analysis, Elsevier, vol. 88(C).
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    More about this item

    Keywords

    Digital finance; Corporate resilience; Financing frictions; The COVID-19 pandemic;
    All these keywords.

    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination

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