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Financial innovation in supply chains and debt contagion: evidence from manufacturing industries

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  • Liu, Yang
  • Wang, Lei

Abstract

The ripple effect of debt contagion can incur severe economic consequences. This paper investigates how financial innovation in supply chains affects corporate debt contagion. Based on the data of manufacturing industries from 2015 to 2024, we offer compelling evidence that higher financial innovation in supply chains is associated with a lower possibility of debt contagion. This effect is more substantial among manufacturers belonging to more supply chain relationships and having more trade credit. Further research suggests that information transparency substantially inhibits debt contagion. The findings are still consistent after coping with endogeneity problems. This research enriches the supply chain research.

Suggested Citation

  • Liu, Yang & Wang, Lei, 2025. "Financial innovation in supply chains and debt contagion: evidence from manufacturing industries," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325016368
    DOI: 10.1016/j.frl.2025.108382
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    References listed on IDEAS

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