Digital economy empowers enterprises to decrease financialization: evidence from e-commerce demonstration cities

Abstract

In the current era of informatization and intelligence, achieving a profound integration of the digital and real economies is essential to high-quality economic development. This study investigates the impact of digital economy development on corporate financialization in China. It employs a staggered difference-in-differences (DID) approach anchored on the establishment of e-commerce demonstration cities. The construction of e-commerce demonstration cities is shown to significantly inhibit the financialization of enterprises, while prompting enterprises to move from "virtual to real." In the context of an economic development strategy that promotes the real economy through digitization, this paper provides new evidence that the digital economy can help enterprises to decrease financialization. Moreover, it presents specific policy implications for further promoting deep integration of the digital and real economies, and cultivating new engines for high-quality economic development.