The Impact of Online Sales on Corporate Financing Constraints

Abstract

China's online sales platforms have surged in the past 15 years, meeting the needs of the majority of consumers and leading economic growth, while also affecting many e-commerce enterprises in terms of investment and financing mechanisms. The ratio of e-commerce online sales to main business income as alternative data contains corporate investment and financing information, and KZ index is finally selected to describe the financing constraints after comparative validation. Using online sales data from Chinese A-share listed companies and some financial data of enterprises in 2016-2022, this paper conducts regression analysis on KZ index and empirically finds that the increase in the online sales ratio is strongly negatively correlated with the degree of funding constraints faced by businesses. With a high degree of participation in e-commerce activities, enterprises will have less financing pressure. This finding brings some inspiration for enterprise operation and financing decisions. Enterprises can reduce the degree of financing constraints by increasing the online sales ratio, so as to better obtain external financing and improve the growth and development of enterprises.