Digital Finance and Corporate Cash-Holding Strategy: Organizational Heterogeneity and Strategic Transmission Channels

Abstract

This study examined the impact of digital finance on corporate cash holdings and the influence of organizational structure and corporate strategy, using the example of A-share-listed companies in China from 2011 to 2018. The results showed that digital finance significantly reduced the level of cash holdings of listed companies; compared with Group Holding Company Limited, the impact of digital finance on the cash holdings of independent enterprises was more pronounced; and digital finance reduced the degree of strategic radicalization of listed companies, then reduced the level of cash holdings of listed companies. The reliability of the empirical results was validated using the dynamic panel model, instrumental variable analysis, and other sensitivity tests. The findings of the study have implications for the guidance of digital finance development and dynamic adjustment of corporate cash holdings.