Can digital financial awareness enhance enterprises' business credit?

Abstract

This study demonstrates that improved digital finance understanding significantly bolsters firm creditworthiness through three independent but interconnected economic mechanisms. Through the analysis of comprehensive firm-level data, we demonstrate that increased awareness of digital financial tools enables businesses to foster the development of regional financial intermediaries. This enhanced understanding promotes institutional innovation, which diminishes information asymmetry and converts intermediaries into data-driven validators of creditworthiness. Concurrently, digital finance expertise alters supply chain power structures, enabling companies to impose advantageous conditions through blockchain financing and algorithmic liquidity management, thereby producing verifiable signals of operational integrity that creditors recognize as a means of mitigating systemic risk. Moreover, this understanding expands funding structures beyond conventional banks, as proficiency in decentralized finance and tokenized assets generates verifiable proof of financial flexibility, instilling confidence in stakeholders for ongoing liquidity. Importantly, these impacts demonstrate considerable variability: State-owned firms utilize institutional advantages to enhance the credit returns of cognition, whereas hyper-competitive industries convert digital literacy into essential survival strategies that expedite trust formation. Our findings confirm that digital finance understanding functions as an institutional trust framework, transforming technological proficiency into market-recognized credibility by integrating firms within ecosystems where data transparency substantiates reliability, diminishes counterparty risk perceptions, and redefines credit allocation models. This research provides practical insights for policymakers developing digital literacy programs and for companies strategically leveraging cognition as intangible, credit-enhancing capital.