The Impact Of Digital Finance On The Duration Of Business Survival

The overall short-term market survival rate of listed companies in China is clearly directly related to their development.Therefore,the key challenge now is to identify the reasons for the short duration of listed companies’ listings and to take appropriate measures to extend the survival period of listed companies.As market participants,listed companies are very sensitive to changes in the macroeconomic environment.In recent years,the application and deep penetration of big data technology in China has driven productivity growth and propelled China’s macro economy into a new era of digital economy.The changing times inevitably bring about corresponding changes in the evolution of companies in the market,affecting their financial environment and financial position.Digital finance has had a significant impact on the business economy through real-time efficiencies and innovative business models,while digital finance has also facilitated the gradual transformation of the business economy into a digital one.This paper explores the relationship between the survival of listed companies and digital finance by combining data on listed companies and digital finance indices,and analyses the impact of digital finance mechanisms on company survival.This paper first summarises the relationship between digital finance and survival of listed companies on the basis of existing literature and puts forward relevant theoretical hypotheses;then empirically investigates the impact of digital finance on corporate survival using survival analysis models;then,at the level of the above empirical framework,this paper empirically analyses the role of digital finance on the survival of heterogeneous firms using firm characteristics and endogeneity;finally,this paper uses mediation models analyses the channels through which digital finance affects firm survival and identifies the mechanisms through which digital finance affects firm survival.The results show that the development of digital finance has significantly reduced the exit risk of firms to a certain extent,and that this impact is significantly heterogeneous in the sample.The channel study suggests that alleviating firms’ financing constraints and promoting innovation and R&D are two important ways in which digital finance improves firm survival.Furthermore,we find that the impact of digital finance development on improving firm survival persists even after endogeneity is removed.