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

Xiya Wu ¹, Yanghui Liu ¹, Biru Xia ²

⁰School of Economics and Management, East China Jiaotong University, Nanchang, Jiangxi, China.

Plos One +

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March 15, 2024

View abstract on PubMed

Summary

Industrial technological progress boosts corporate risk-taking. Digital financial development further enhances this effect, particularly in eastern regions and high-tech industries, by easing financing constraints and improving innovation.

Area Of Science

Economics
Finance
Technology Management

Background

Industrial technological progress influences firm profitability and competitive dynamics.
Understanding the interplay between technological advancement, corporate risk-taking, and digital finance is crucial for economic growth.
Existing research may not fully capture the nuanced relationship in emerging markets.

Purpose Of The Study

To empirically investigate the causal impact of industrial technological progress on corporate risk-taking.
To examine the mediating role of digital financial development in this relationship.
To identify regional and industry-specific variations in the effects.

Main Methods

Econometric analysis of panel data from China's A-share listed businesses (2011-2020).
Regression analysis to assess the impact of industrial technological progress on enterprise risk-taking.
Moderation analysis to evaluate the role of digital financial development.

Main Results

Industrial technological progress significantly improves enterprise risk-taking levels.
Digital financial development positively moderates the relationship, incentivizing both progress and risk-taking.
Financing constraint relaxation, enhanced capital returns, and innovation incentives are key mechanisms through which digital finance amplifies the effect.

Conclusions

Industrial technological progress is a key driver of corporate risk-taking, amplified by digital financial development.
Digital finance plays a vital role in facilitating risk-taking by alleviating financial constraints and boosting innovation.
Policy interventions should consider leveraging digital finance to promote technological progress and enhance corporate risk appetite, especially in high-tech sectors and developed regions.