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Digital transformation whitewashing and financing constraints

Author

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  • Feng, Yaxin
  • Li, Yanhong
  • Lin, Tiantian

Abstract

This study investigates the drivers and consequences of digital transformation whitewashing (DTW) among Chinese manufacturing firms from 2010 to 2021. We find that financing constraints have a robust and significant positive impact on DTW, an effect that is more pronounced for firms located in provinces with lower marketization or operating in industries with lower levels of monopoly. Regarding economic consequences, our results indicate that DTW fails to alleviate external financing constraints, instead causing firms to increasingly rely on internal financing.

Suggested Citation

  • Feng, Yaxin & Li, Yanhong & Lin, Tiantian, 2024. "Digital transformation whitewashing and financing constraints," Finance Research Letters, Elsevier, vol. 69(PB).
    • Handle: RePEc:eee:finlet:v:69:y:2024:i:pb:s1544612324012716
    DOI: 10.1016/j.frl.2024.106242
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    References listed on IDEAS

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    Cited by:

    1. Xiaofei Jia & Lichao Lin & Ziling Huang, 2025. "Transformative forces: how capital intensity and technological innovation shape digital evolution in Chinese enterprises," Eurasian Business Review, Springer;Eurasia Business and Economics Society, vol. 15(4), pages 1205-1224, December.
    2. Yan, Luqing & Lou, Yanchun & Wang, Xiaoqing, 2025. "Business model innovation, intellectual property protection, and firm growth," Finance Research Letters, Elsevier, vol. 84(C).
    3. Yali Li & Gaobin Du & Yilun Lu, 2025. "Management incentives, governance, and digital transformation: effects on financial disclosure integrity," Journal of Economics and Finance, Springer;Academy of Economics and Finance, vol. 49(4), pages 1115-1145, December.
    4. Mingtao Yan & Jianji Zhao & Mingyue Yan & Lianlian Wang & Shimeng Zhou & Minghao Zhang, 2025. "Coupling coordination relationship between high-quality economic development and carbon emission performance in China: degree measurement, spatio-temporal evolution, and driving factors," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 27(10), pages 24061-24081, October.

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    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill

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