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Can technology finance help companies break free from “blood transfusion” dependency? The risk mitigation effect of financial flexibility

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  • Liu, Renzhong
  • Lv, Lin

Abstract

Based on data from Chinese A-share listed companies from 2011 to 2023 with fixed effects models, this paper empirically examines the impact of technology finance on corporate dependence on external financing and its underlying mechanisms. Corporate reliance on external financing is significantly reduced by the advancement of technology finance, as evidenced by this study. Furthermore, both financial flexibility and managerial risk appetite strengthen this mitigating effect. The analysis of heterogeneity reveals that the mitigating impact of technology finance is stronger for firms undergoing deeper digital transformation, as well as for those operating in regions with less developed markets. This research provides new empirical evidence for understanding the real economic effects of technology finance and offers a theoretical basis and practical reference for policymakers aiming to optimize the technology finance ecosystem and for companies seeking to enhance their endogenous financing capabilities.

Suggested Citation

  • Liu, Renzhong & Lv, Lin, 2026. "Can technology finance help companies break free from “blood transfusion” dependency? The risk mitigation effect of financial flexibility," Finance Research Letters, Elsevier, vol. 105(C).
    • Handle: RePEc:eee:finlet:v:105:y:2026:i:c:s1544612326007543
    DOI: 10.1016/j.frl.2026.110226
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    JEL classification:

    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • M10 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Administration - - - General

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