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Digital village construction, dual financing constraints, and agribusiness intelligent transformation

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  • Liu, Jingzhi
  • Feng, Jiajia

Abstract

Financing constraints are a central friction in corporate investment decisions, yet their role in shaping how firms respond to external digital environment improvements is not well understood. This study investigates whether digital village construction promotes the intelligent transformation of agriculture-related firms and how internal and external financing constraints moderate this relationship. Using the staggered rollout of China’s national digital village pilot counties as a quasinatural experiment and a panel dataset of agriculture-related A-share listed firms from 2010 to 2024, we document three sets of findings. Digital village construction significantly promotes intelligent transformation, and this result is robust to alternative measures, placebo tests, and multiple sensitivity checks. Internal and external financing constraints significantly attenuate the positive effect, indicating that financial frictions constitute a binding boundary condition for the real effects of digital infrastructure investment. The effect is stronger among state-owned enterprises and statistically significant in the downstream agroprocessing subsample, and it grows over time. These findings highlight the complementarity between digital infrastructure policy and financial market conditions in driving firm-level technological upgrading, suggesting that targeted financial instruments for agriculture-related firms would increase returns to rural digitalization.

Suggested Citation

  • Liu, Jingzhi & Feng, Jiajia, 2026. "Digital village construction, dual financing constraints, and agribusiness intelligent transformation," Finance Research Letters, Elsevier, vol. 106(C).
    • Handle: RePEc:eee:finlet:v:106:y:2026:i:c:s1544612326008470
    DOI: 10.1016/j.frl.2026.110319
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    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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