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Does Digital Finance Flatten Supply Chain Risk for Manufacturing Firms

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  • Li, Jian
  • Bao, Wenqing
  • Luo, Jing

Abstract

The accelerating trends of deglobalization and geopolitical tension have increased the vulnerability of global corporate supply chains. As a product of the deep integration between digital technologies and financial services, digital finance plays an important role in mitigating these risks for manufacturing firms. This study examines how the Digital Finance Index affects supply chain risks among China’s listed manufacturing firms from 2017 to 2023. The results show that digital finance significantly reduces supply chain risks by improving capital flows and information efficiency, particularly by easing financing constraints and enhancing inventory turnover. Heterogeneity analysis further indicates that this risk-mitigating effect is stronger for nonstate-owned enterprises, firms with higher digitalization, and downstream supply chain participants. These findings offer insights for strengthening global supply chain resilience, improving resource allocation, and enhancing economic risk resistance, with meaningful implications for global stability and sustainable development.

Suggested Citation

  • Li, Jian & Bao, Wenqing & Luo, Jing, 2026. "Does Digital Finance Flatten Supply Chain Risk for Manufacturing Firms," Finance Research Letters, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:finlet:v:91:y:2026:i:c:s154461232502690x
    DOI: 10.1016/j.frl.2025.109441
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