Regional Digital Finance and Corporate Financial Risk: Based on Chinese Listed Companies

Using digital inclusive finance data from Peking University, this paper empirically examines the relationship between regional digital finance development and the financial risk of listed companies. The mechanism test finds that digital finance development can significantly reduce corporate financial risk. Digital finance has a resource effect and governance effect, reducing corporate financial risk by alleviating corporate financing constraints and reducing inefficient investment. Heterogeneity tests show that the reduction effect of digital finance on corporate financial risk is more significant in SMEs, private firms, and firms with non-overconfident managers.