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Enterprise digital transformation and bond credit spreads: From the perspective of risk premium

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  • Du, Kunkai
  • Liu, Jun
  • Wang, Kunlun
  • Zhao, Qicheng

Abstract

Bonds are an important financing method for Chinese enterprises. How to reduce bond financing costs is an important research content in financial management. Using text-based measures of digital transformation, this paper examines its effect on corporate bond credit spreads among Chinese listed firms from 2010 to 2022. The results show that digital transformation significantly increases credit spreads, and this finding remains robust after various tests for endogeneity and robustness. Further examination find that the risk premium plays an impact mechanism, that is, the digital transformation of enterprises increases the level of corporate risk-taking, strategic radicalness, and investment and financing maturity mismatch, thereby increasing the credit spread of bond issuance. Finally, the positive impact of digital transformation on corporate bond credit spreads is more significant in the sample of non-state-owned, non-high-tech and small-capitalization companies, companies without digital executive backgrounds, and companies located in the central and western regions. This paper enriches the research on the negative economic consequences of enterprise digital transformation.

Suggested Citation

  • Du, Kunkai & Liu, Jun & Wang, Kunlun & Zhao, Qicheng, 2025. "Enterprise digital transformation and bond credit spreads: From the perspective of risk premium," Economic Analysis and Policy, Elsevier, vol. 88(C), pages 2079-2097.
    • Handle: RePEc:eee:ecanpo:v:88:y:2025:i:c:p:2079-2097
    DOI: 10.1016/j.eap.2025.11.015
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