IDEAS home Printed from https://ideas.repec.org/a/eee/reveco/v96y2024ipcs1059056024006889.html
   My bibliography  Save this article

Digital finance, capital misallocation and corporate innovation

Author

Listed:
  • Zhu, Wenpeng

Abstract

This paper empirically analyses the impact mechanism of digital finance on corporate innovation, focusing on the mediating role of capital misallocation. The results show that digital finance significantly promotes corporate innovation, and capital misallocation plays a mediating role. Specifically, compared with state-owned enterprises, digital finance in non-state-owned enterprises is more significant in promoting corporate innovation. Additionally, compared with small and medium-sized enterprises, this promotion is more obvious in large enterprises. The findings of this paper pass the robustness test, indicating the reliability and validity of our results.

Suggested Citation

  • Zhu, Wenpeng, 2024. "Digital finance, capital misallocation and corporate innovation," International Review of Economics & Finance, Elsevier, vol. 96(PC).
    • Handle: RePEc:eee:reveco:v:96:y:2024:i:pc:s1059056024006889
    DOI: 10.1016/j.iref.2024.103696
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1059056024006889
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.iref.2024.103696?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Loren Brandt & Trevor Tombe & Xiadong Zhu, 2013. "Factor Market Distortions Across Time, Space, and Sectors in China," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 39-58, January.
    2. Alam, M. Jahangir, 2020. "Capital misallocation: Cyclicality and sources," Journal of Economic Dynamics and Control, Elsevier, vol. 112(C).
    3. Du, Yanan & Wang, Qingxi & Zhou, Jianping, 2023. "How does digital inclusive finance affect economic resilience: Evidence from 285 cities in China," International Review of Financial Analysis, Elsevier, vol. 88(C).
    4. Yin, Lei & Yang, Yuanyuan, 2024. "How does digital finance influence corporate greenwashing behavior?," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 359-373.
    5. Bo Li & Zhenya Liu & Xuemei Jia & Fengping Ma, 2024. "Digital Finance, Financing Constraints, and Green Technological Innovation: A Spatial Analysis," Post-Print hal-04894960, HAL.
    6. Chen, Hong & Hu, Shangui & Cai, Yuqing, 2024. "Driving effect of fintech on firm green innovation in China's strategic emerging industries: The mediating role of digital transformation," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    7. Lei Guo & Luying Xu & Junyi Wang & Jingwen Li, 2024. "Digital transformation and financing constraints of SMEs: evidence from China," Asia-Pacific Journal of Accounting & Economics, Taylor & Francis Journals, vol. 31(6), pages 966-986, November.
    8. Yue Liu & Siming Liu & Xueying Xu & Pierre Failler, 2020. "Does Energy Price Induce China’s Green Energy Innovation?," Energies, MDPI, vol. 13(15), pages 1-18, August.
    9. Hsuan-Li Su, 2024. "Financial Frictions, Capital Misallocation, and Input-Output Linkages," American Economic Journal: Macroeconomics, American Economic Association, vol. 16(2), pages 62-94, April.
    10. Li, Yuanyuan & Zhang, Yindan & Geng, Liping, 2024. "Digital finance, financing constraints and supply chain resilience," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    11. Joel M. David & Venky Venkateswaran, 2019. "The Sources of Capital Misallocation," American Economic Review, American Economic Association, vol. 109(7), pages 2531-2567, July.
    12. Zhu, Xiaolu, 2023. "Size-dependent financial frictions, capital misallocation, and aggregate productivity," Macroeconomic Dynamics, Cambridge University Press, vol. 27(5), pages 1345-1382, July.
    13. Ryzhenkov, Mykola, 2016. "Resource misallocation and manufacturing productivity: The case of Ukraine," Journal of Comparative Economics, Elsevier, vol. 44(1), pages 41-55.
    14. Kong, Dongmin & Yang, Xiandong & Xu, Jian, 2020. "Energy price and cost induced innovation: Evidence from China," Energy, Elsevier, vol. 192(C).
    15. Hirakata, Naohisa & Sunakawa, Takeki, 2019. "Financial frictions, capital misallocation and structural change," Journal of Macroeconomics, Elsevier, vol. 61(C), pages 1-1.
    16. Bu, Ya & Du, Xin & Wang, Yuting & Liu, Shuyu & Tang, Min & Li, Hui, 2024. "Digital inclusive finance: A lever for SME financing?," International Review of Financial Analysis, Elsevier, vol. 93(C).
    17. Yang, Sen & Xu, Jiawei & Lei, Tianyi & Wang, Mengdi, 2024. "How to improve the efficiency of green development? The role of digital finance," Finance Research Letters, Elsevier, vol. 63(C).
    18. Guo, Bingnan & Hu, Peiji & Lin, Ji, 2024. "The effect of digital infrastructure development on enterprise green transformation," International Review of Financial Analysis, Elsevier, vol. 92(C).
    19. Aoki, Shuhei, 2012. "A simple accounting framework for the effect of resource misallocation on aggregate productivity," Journal of the Japanese and International Economies, Elsevier, vol. 26(4), pages 473-494.
    20. Liu, Yang & Luan, Lin & Wu, Weilong & Zhang, Zhiqiang & Hsu, Yen, 2021. "Can digital financial inclusion promote China's economic growth?," International Review of Financial Analysis, Elsevier, vol. 78(C).
    21. Lin, Baoguo & Dong, Xueqin, 2024. "Empirical Study on the Impact of Digital Finance on Commercial Credit Allocation in SMEs," Finance Research Letters, Elsevier, vol. 61(C).
    22. Shao, Fangjing & Jiao, Ziyan & Jin, Tianquan & Zhu, Xingwang, 2024. "Bridging the gap: Digital finance's role in addressing maturity mismatch in investment and financing for agricultural enterprises," Finance Research Letters, Elsevier, vol. 64(C).
    23. Jin, Laiqun & Dai, Jiaying & Jiang, Weijie & Cao, Kairui, 2023. "Digital finance and misallocation of resources among firms: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 66(C).
    24. Meng, Li & Su, Taoyong & Zhang, Jintao, 2024. "Environmental performance shortfalls and corporate green innovation: The role of green credit regulation," International Review of Economics & Finance, Elsevier, vol. 96(PA).
    25. Weiguo Xiao & Qi Deng & Wei Yuan & Naiqian Wu, 2023. "Financial frictions, capital misallocation, and total factor productivity: evidence from China," Applied Economics, Taylor & Francis Journals, vol. 55(41), pages 4853-4870, September.
    26. Li, Bo & Liu, Zhenya & Jia, Xuemei & Ma, Fengping, 2024. "Digital finance, financing constraints, and green technological innovation: A spatial analysis," Global Finance Journal, Elsevier, vol. 61(C).
    27. Xue, Qing & Liu, Xiangqin, 2024. "Can digital finance boost corporate green innovation," Finance Research Letters, Elsevier, vol. 62(PB).
    28. Yang, Jinxuan & Hui, Ning, 2024. "How digital finance affects the sustainability of corporate green innovation," Finance Research Letters, Elsevier, vol. 63(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Yuanyuan, 2025. "Digital financial inclusion and intangible cultural heritage," Finance Research Letters, Elsevier, vol. 77(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Wang, Mansi & Yu, Xinxin & Hong, Xinyi & Yang, Xiaotao, 2025. "Can digital finance promote green innovation collaboration in enterprises?," Global Finance Journal, Elsevier, vol. 65(C).
    2. Li, Yuanyuan, 2025. "Digital financial inclusion and intangible cultural heritage," Finance Research Letters, Elsevier, vol. 77(C).
    3. Hao, Yu & Gai, Zhiqiang & Wu, Haitao, 2020. "How do resource misallocation and government corruption affect green total factor energy efficiency? Evidence from China," Energy Policy, Elsevier, vol. 143(C).
    4. Shang, Zhaoyan & Chen, Hanwen, 2025. "Supply chain transparency and corporate financial fraud," Finance Research Letters, Elsevier, vol. 77(C).
    5. Yunwei Li & Qiuping Ji & Zijie Wang & Zishan Xiong & Simeng Zhan & Yiping Yang & Yu Hao, 2022. "Green energy mismatch, industrial intelligence and economics growth: theory and empirical evidence from China," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 24(10), pages 11785-11816, October.
    6. Ling-Yun He & Xiao-Feng Qi, 2021. "Resource Misallocation and Energy-Related Pollution," IJERPH, MDPI, vol. 18(10), pages 1-19, May.
    7. Trenczek, Jan & Wacker, Konstantin M., 2023. "Human Capital Misallocation and Output per Worker Differences: Beyond Cobb-Douglas," GLO Discussion Paper Series 1331, Global Labor Organization (GLO).
    8. Zhou, Yuanxiang & Liu, Huayan & Chen, Chan & Ma, Yingqi, 2025. "The impact of digital inclusive finance on green economic efficiency: Pathways to inclusive sustainability," Research in International Business and Finance, Elsevier, vol. 76(C).
    9. Wang, Wenwen, 2025. "Digital finance and firm green innovation: The role of media and executives," Finance Research Letters, Elsevier, vol. 74(C).
    10. Xu, Jiangchuan & Wang, En-Ze, 2024. "The path to energy savings and CO2 emission reductions in China's industrial sector from the perspective of factor price distortions correction - Based on an extended capital vintage model," Energy, Elsevier, vol. 313(C).
    11. Cui, Yi, 2024. "Place-based policies and capital misallocation: Evidence from Chinese cities," Economic Systems, Elsevier, vol. 48(4).
    12. Zhao, Qiao & Wang, Wangqing, 2024. "Impact of digital financial tools on intermediate goods: Synergies between external funding and internal R&D investment," Finance Research Letters, Elsevier, vol. 67(PB).
    13. Yu Hao & Jingwen Huang & Yunxia Guo & Haitao Wu & Siyu Ren, 2022. "Does the legacy of state planning put pressure on ecological efficiency? Evidence from China," Business Strategy and the Environment, Wiley Blackwell, vol. 31(7), pages 3100-3121, November.
    14. Yidan Liang, 2023. "The effect of capital and labour distortion on innovation," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 63(2), pages 1709-1737, June.
    15. Jiang, Tangyang & Guo, Qimeng & Yu, Jinghan & Jahanger, Atif & Yu, Yang & Li, Xiaolong, 2025. "Spatial mismatch of resources in China under the “dual-carbon” goal: A new perspective incorporating energy and environmental factors," Energy, Elsevier, vol. 320(C).
    16. Song, Hongti & Chen, Wei, 2025. "A digital blueprint for sustainability: Can digital infrastructure policies promote renewable energy innovation?," Renewable Energy, Elsevier, vol. 244(C).
    17. Wang, Nian & Huang, Yue & Liao, Ruiwen, 2025. "Kill two birds with one stone: How to strengthen digital new infrastructure's impacts on urban green innovation – The channel of factor allocation," International Review of Economics & Finance, Elsevier, vol. 98(C).
    18. Dong, Xiaotian & Cui, Ruiqin & Bai, Xiaodong & Liu, Kexiao, 2024. "Can digital inclusive finance reduce household poverty? Evidence from the China household finance survey," International Review of Economics & Finance, Elsevier, vol. 96(PB).
    19. Song, Yang & Zhang, Yue & Zhang, Zhipeng & Sahut, Jean-Michel, 2025. "Artificial intelligence, digital finance, and green innovation," Global Finance Journal, Elsevier, vol. 64(C).
    20. Zhou, Fujin & Oostendorp, Remco, 2024. "Big distortions, small efficiency loss: Measuring resource misallocation with complementary distortions in Vietnam," Journal of Economic Behavior & Organization, Elsevier, vol. 219(C), pages 244-261.

    More about this item

    Keywords

    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:reveco:v:96:y:2024:i:pc:s1059056024006889. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/620165 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.