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Digital Economy Development and Trade Credit Supply: Evidence from Chinese A-Share Listed Firms

Author

Listed:
  • Li, Donghui
  • Liu, Yingdong
  • Zhang, Liangtao
  • Zheng, Zunxin

Abstract

This research examines how the digital economy influences the provision of trade credit and elucidates the underlying theoretical framework. Utilizing a digital economy metric derived from principal component analysis alongside data from Chinese firms, our research reveals that digital economy progression enhances trade credit availability by easing financial restrictions and fostering innovation among businesses. The robustness of this finding is upheld when considering a range of control factors, different ways of quantifying the variables, the omission of unique industries, the application of an instrumental variable method, and modifications to the time frame of the sample. Additionally, our study reveals that the stimulatory impact of the digital economy on trade credit availability is notably greater in enterprises of small scale, those involved in manufacturing, and privately-held companies.

Suggested Citation

  • Li, Donghui & Liu, Yingdong & Zhang, Liangtao & Zheng, Zunxin, 2025. "Digital Economy Development and Trade Credit Supply: Evidence from Chinese A-Share Listed Firms," Research in International Business and Finance, Elsevier, vol. 77(PA).
    • Handle: RePEc:eee:riibaf:v:77:y:2025:i:pa:s0275531925001564
    DOI: 10.1016/j.ribaf.2025.102900
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    Keywords

    Digital economy; Supply of trade credit; Financial constraints; Corporate innovation; JEL classification; O31; G30; G33;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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