Reconfiguring capital structures through digital R&D: Mechanisms and empirical insights

Abstract

In light of increasing apprehensions regarding the ineffectiveness of capital structure modification, digital R&D presents an innovative avenue for financial enhancement. This study examines the effect of digital R&D on capital structure deviation using panel data from Chinese A-share non-financial listed companies. The results demonstrate that digitization markedly lowers deviation from target leverage, chiefly by alleviating financial limitations and enhancing the quality of information disclosure. The impact is particularly significant among companies with subpar information environments, restricted control over financial resources, and those situated in more developed areas, offering practical insights for digitally-driven financial policy and corporate governance reform.