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Fintech, banking competition and corporate leverage manipulation

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  • Li, Feifei
  • Xue, Ruile
  • Du, Mingyue
  • Liu, Yuxing

Abstract

Corporate leverage manipulation can hinder enterprise development and threaten macro-financial stability, underscoring the need for effective management strategies. This study examines the influence of financial technology (Fintech) on corporate leverage manipulation, drawing on data from Chinese A-share listed companies from 2011 to 2022. Empirical results reveal that Fintech significantly curbs leverage manipulation primarily by intensifying banking competition. The effect is more pronounced among non-state-owned enterprises, digitally underdeveloped firms, and high-technology manufacturers, as well as firms located in regions with less developed traditional financial systems or under stricter financial supervision. Furthermore, the analysis shows that Fintech has notably reduced manipulation involving nominal equity but actual debt, thereby mitigating financial risks and fostering high-quality enterprise growth.

Suggested Citation

  • Li, Feifei & Xue, Ruile & Du, Mingyue & Liu, Yuxing, 2025. "Fintech, banking competition and corporate leverage manipulation," Pacific-Basin Finance Journal, Elsevier, vol. 94(C).
    • Handle: RePEc:eee:pacfin:v:94:y:2025:i:c:s0927538x25002471
    DOI: 10.1016/j.pacfin.2025.102910
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