Central bank digital currency and corporate risk-taking: evidence from China

This study examines the effect of central bank digital currency (CBDC) on corporate risk-taking. Using Chinese A-share listed firms from 2017 to 2023, we exploit the pilot rollout of China’s CBDC(e-CNY) as a quasi-natural experiment and implement a multi-period difference-in-differences (DID) design. The results show that CBDC significantly increases corporate risk-taking, and this finding remains robust to a range of tests. Heterogeneity analyses indicate that the effect is more pronounced among non-state-owned enterprises (non-SOEs) and firms with higher institutional ownership. Mechanism analyses suggest that CBDC operates by alleviating agency problems and financing constraints, which enhances firms’ risk-taking propensity and capacity. The study further documents that the increased corporate risk-taking associated with CBDC is associated with higher firm value and total factor productivity (TFP). These findings extend the literature on the economic consequences of CBDC and the determinants of corporate risk-taking, while offering useful implications for its broader promotion and application.