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ABSTRACT
We investigate the relation between digital finance and debt concentration in capital structures of firms. Measuring digital finance with a comprehensive index, we show that digital finance is indeed related to more concentrated debt structures of firms. Turning to the sub-indices of digital finance, coverage breadth and usage depth of digital finance increase firms’ debt concentration, while digitization degree is not a central concern for firms. The link between digital finance and debt concentration is stronger for companies with high level of information asymmetry and high default risk.
Disclosure statement
No potential conflict of interest was reported by the author(s).
Additional information
Funding
This work was supported by Education Department of Hubei Province [21Q133].
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