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Industrial technology progress, digital finance development and corporate risk-taking: Evidence from China’s listed firms

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  • Xiya Wu
  • Yanghui Liu
  • Biru Xia

Abstract

Industrial technological progress, as an essential industrial-technological and institutional phenomenon, brings with it the possibility of high profits for firms but also implies new norms and rules of competition, which affect the willingness and propensity of firms to bear the costs of undertaking venture capital projects. This study empirically investigates the causal impact of industrial-technological progress on corporate risk-taking and the mechanism of digital financial growth on the relationship between the two, based on data from China’s A-share listed businesses from 2011 to 2020. This paper finds that (1) industrial technological progress improves enterprise risk-taking levels. Moreover, digital financial development has an incentive effect on industrial technological progress and enterprise risk-taking levels. (2) Industrial technological progress under digital financial development generates financing constraint relaxation effects, input capital return enhancement effects, and innovation performance incentive effects, increasing enterprise risk-taking. (3) The positive moderating effect of digital financial development on the relationship between industrial technological progress and the risk-taking level of enterprises in the eastern regions and enterprises in the high-tech industry is more prominent. The study’s findings provide a theoretical foundation and policy insights on the crucial elements of industrial-technological progress and enterprises’ increased ability to take risks throughout the development of digital finance.

Suggested Citation

  • Xiya Wu & Yanghui Liu & Biru Xia, 2024. "Industrial technology progress, digital finance development and corporate risk-taking: Evidence from China’s listed firms," PLOS ONE, Public Library of Science, vol. 19(3), pages 1-19, March.
    • Handle: RePEc:plo:pone00:0298734
    DOI: 10.1371/journal.pone.0298734
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    References listed on IDEAS

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    1. Coles, Jeffrey L. & Daniel, Naveen D. & Naveen, Lalitha, 2006. "Managerial incentives and risk-taking," Journal of Financial Economics, Elsevier, vol. 79(2), pages 431-468, February.
    2. Mara Faccio & Maria-Teresa Marchica & Roberto Mura, 2011. "Large Shareholder Diversification and Corporate Risk-Taking," The Review of Financial Studies, Society for Financial Studies, vol. 24(11), pages 3601-3641.
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    Cited by:

    1. Xue Li & Qiaozhi Chu, 2025. "Digital finance and corporate risk-taking: evidence from China," Eurasian Economic Review, Springer;Eurasia Business and Economics Society, vol. 15(2), pages 353-378, June.

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