The Impact of Digital Finance on Deleveraging of A-Share Listed Companies in China: A Crucial Research Topic
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Abstract
This research aimed to analyze the impact of digital finance development on the deleveraging of A-share listed companies. Based on the panel data of 1,111 A-share listed companies from 2011 to 2022, this research established a panel fixed effect model for analysis. The empirical results showed that the development of digital finance in China can significantly reduce the leverage ratio of enterprises; that is, the development of China's digital finance is conducive to the deleveraging of enterprises. The robustness test and endogenous problem treatment examined the above results, indicating that the above conclusions were robust. The heterogeneity analysis showed that developing digital finance in China could significantly reduce the leverage ratio of non-state-owned enterprises. However, the impact on state-owned enterprises' leverage ratio was insignificant. The development of digital finance in China can significantly reduce the leverage ratio of small enterprises, with no significant impact on the leverage ratio of medium and large enterprises. The development of digital finance in China can significantly reduce the long-term leverage ratio of enterprises, but the impact on the short-term leverage ratio was not significant. The analysis of the mediating effect showed that the development of digital finance in China can deleverage enterprises by reducing financing costs and alleviating financing constraints. The moderating effect analysis showed that the impact of digital financial development in China on enterprise deleveraging was moderated by financial supervision. The stronger the financial supervision, the weaker the impact of China's digital financial development on corporate deleveraging. This research also further verified that there is no non-linear relationship between China's digital finance development and corporate deleveraging.
Based on the above analysis, this research put forward policy suggestions from the government, enterprises, investors, and regulators, as well as the digital financial development strategy of enterprise deleveraging from the government and enterprise aspects. The research results can not only enrich the research on digital finance and corporate deleveraging but also provide certain policy suggestions to the government, regulatory agencies, enterprises, and investors in practice and can provide the strategy of digital finance to help deleveraging, so the research was of great significance.
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