Can FinTech alleviate the long-term use of short-term debts? Evidence from China

Abstract

Purpose

To deepen the structural reform of the financial system on the supply side and mitigate associated risks in the economic and financial fields, with significant practical implications for FinTech development.

Design/methodology/approach

Based on microdata of listed companies, this paper constructs multi-level indicators of FinTech development. Robustness tests include alternative measures of the degree of long-term use of short-term debts, sample adjustments and heterogeneity in firm characteristics and regional differences.

Findings

FinTech can significantly alleviate the long-term use of short-term corporate debt, although there are heterogeneous effects. The alleviation effect is more pronounced for state-owned enterprises, non-technology-intensive enterprises and other companies with lower levels of short-term debt maturity. Additionally, in regions with high capital mismatch and high levels of financial development, FinTech exhibits a significant suppressive effect on the long-term use of short-term corporate debt.

Practical implications

The paper suggests promoting the diversification of FinTech products, emphasizing the importance of inclusive finance through FinTech, and driving China’s economic transformation and high-quality development.

Originality/value

By constructing a theoretical analysis framework of “FinTech—corporate investment and financing term mismatch,” this paper provides a multi-level estimation of the factors influencing FinTech’s impact on the long-term use of short-term corporate debt. This framework aids in developing a more dialectical and objective understanding of the economic effects of FinTech’s development.

Citation

Yang, L., Hong, Y., Zhang, X. and Zhang, Q. (2024), "Can FinTech alleviate the long-term use of short-term debts? Evidence from China", China Finance Review International, Vol. ahead-of-print No. ahead-of-print. https://doi.org/10.1108/CFRI-06-2024-0329