Digital financial development and inefficient investment: a study based on the dual perspectives of resource and governance effects

As one of the most crucial domains within the digital economy, digital finance has garnered significant attention due to its impact on firms. This study empirically examines the influence of digital finance on inefficient investment, using a sample of Chinese non-financial firms from 2011 to 2019. R...

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Bibliographic Details
Published in:Humanities & social sciences communications 2024-12, Vol.11 (1), p.104-10, Article 104
Main Authors: Xue, Liuyang, Dong, Junan, Jiang, Shiyao
Format: Article
Language:English
Subjects:
Asymmetry
Capital markets
Costs
Digital technology
Efficiency
Financial services
Net present value
Regulatory agencies
Stockholders
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Summary:As one of the most crucial domains within the digital economy, digital finance has garnered significant attention due to its impact on firms. This study empirically examines the influence of digital finance on inefficient investment, using a sample of Chinese non-financial firms from 2011 to 2019. Results show that digital finance effectively mitigates firm inefficient investment, with a more pronounced effect observed in non-state firms and those operating in regions with higher levels of institutional development. Mechanism analysis demonstrates that digital finance mitigates inefficient investment through resource and governance effects. Further analysis shows that the breadth of coverage, use depth, and digital support services of digital finance all contribute to reducing inefficient investment. Moreover, digital finance enhances the willingness and ability of firms to invest and improves their overall investment levels. These results provide evidence for the positive impact of digital finance in mitigating inefficient investment.
ISSN:2662-9992
2662-9992
DOI:10.1057/s41599-023-02411-5