|
|
|
| Digital Transformation of Banks and the Dynamic Adjustment of Corporate Capital Structure: A Discussion on Credit Discrimination |
| SONG Ke, YU Qianzi, GUO Yiming
|
| School of Finance/International School of Finance, Renmin University of China |
|
|
|
Abstract Financial technology, as a core engine driving modern financial system, plays a pivotal role in deepening financial supply-side structural reform and fostering high-quality economic development. Since the 2008 global financial crisis, China’s macro leverage has risen persistently, and the COVID-19 pandemic has exposed firms’ debt vulnerabilities, making capital structure optimization a critical issue. In response, China has adopted the strategic principle of “coordinating development and security”, pursuing growth while building robust safeguards against systemic risks, and has mandated systematic digital transformation of financial institutions, shifting risk management from human-reliant prevention to technology-enabled intelligent control. As a key link, bank digitalization is profoundly reshaping credit allocation, risk identification, and bank-firm interactions, creating new possibilities for dynamic capital structure adjustment. Leveraging this transformation to accelerate firms’ adjustment toward target capital structure thus becomes central to preventing major financial risks and advancing high-quality development. However, while extensive studies examine traditional bank factors, including credit supply, bank connections, and credit market frictions, the role of banks’ own digital transformation remains largely unexplored.
To address this gap, this paper takes A-share listed companies in China from 2014 to 2023 as the research sample and empirically investigates the impact of commercial bank digital transformation on the dynamic adjustment of corporate capital structure through the lens of bank-firm relationships. The findings reveal that bank digital transformation significantly accelerates the speed of capital structure adjustment, a result that holds under a battery of robustness checks. Regarding the sub-dimensions of digital transformation, digital organization, digital products, and digital technology, all significantly enhance the speed of corporate capital structure adjustment. Mechanism analysis demonstrates two channels: first, bank digital transformation enhances banks’ information screening capability, enabling them to more accurately identify firms’ actual production, operational conditions, and credit quality; second, it strengthens banks’ monitoring and governance over borrowing firms, thereby alleviating agency problems and raising the speed of adjustment. Heterogeneity analysis indicates that the accelerating effect is more pronounced when the firm’s largest lending bank is a small or medium-sized institution, and during periods of elevated economic policy uncertainty. Further analysis shows that bank digital transformation helps mitigate credit discrimination embedded in traditional lending practices, specifically size-based discrimination and ownership-based discrimination, thereby promoting a structural adjustment of corporate leverage.
This study makes three main contributions. First, it integrates bank digital transformation into a unified bank-firm framework of capital structure dynamics, extending research on adjustment speed determinants. Prior studies focus on firm-internal and external factors; the limited fintech literature addresses only external digital finance for long-tail clients, overlooking banks’ internal digital transformation serving traditional corporate borrowers. Second, by uncovering the information screening and monitoring channels, this paper deepens the understanding of digital bank-firm interactions and enriches research on the economic consequences of bank digital transformation from the novel perspective of capital structure dynamics. Third, from the perspective of coordinating development and security, we show that bank digital transformation mitigates size- and ownership-based credit discrimination by accelerating the deleveraging of large and state-owned firms, offering clear references for financial supply-side structural reform, strengthening the real-economy service capacity of finance, and preventing financial risks.
Based on the above findings, this paper offers the following policy recommendations. First, continuously deepen bank digital transformation across all dimensions, harnessing its role in mitigating credit discrimination and optimizing capital structure. Second, embed digital tools into the full credit process, integrating transaction flows, tax records, and supply chain data with knowledge graphs and anomaly detection to build fund-flow monitoring systems, thereby reducing adjustment costs and empowering optimization through screening and monitoring. Third, implement differentiated, forward-looking policy guidance to amplify positive effects in critical periods and key areas. During heightened volatility, guide banks to strengthen dynamic credit management and risk early warning with digital tools; simultaneously enhance support for digital capacity building of small and medium-sized banks, improving their ability to identify financing needs and streamline credit processes, thus accelerating capital structure adjustment more effectively.
|
|
Received: 01 December 2025
Published: 19 October 2026
|
|
|
|
|
|
|
|
