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Digital finance and corporate risk-taking: evidence from China

Author

Listed:
  • Xue Li

    (Southwestern University of Finance and Economics)

  • Qiaozhi Chu

    (Southwestern University of Finance and Economics)

Abstract

In the context of digital finance and efforts to foster high-quality economic growth through the development of a financial powerhouse, understanding how digital finance affects corporate risk-taking holds both theoretical and practical significance. This paper investigates the relationship between digital finance and corporate risk-taking, utilizing data from A-share listed companies in China spanning 2011 to 2021, and delves into the underlying mechanisms. The results reveal that digital finance significantly boosts corporate risk-taking. Specifically, this effect is achieved through mitigating financial risk, expanding investment opportunities, and curbing controlling shareholders’ equity pledges. Moreover, the impact of digital finance on corporate risk-taking is more pronounced in non-state-owned enterprises and under conditions of looser monetary policy. These findings contribute to the literature on the micro-level effects of digital finance and highlight its role in advancing high-quality financial development and enhancing financial services for the real economy.

Suggested Citation

  • 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.
    • Handle: RePEc:spr:eurase:v:15:y:2025:i:2:d:10.1007_s40822-024-00299-3
    DOI: 10.1007/s40822-024-00299-3
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    JEL classification:

    • G20 - Financial Economics - - Financial Institutions and Services - - - General
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • P34 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - Finance

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