Baseline results (IMAGE)
Caption
Columns 1 and 2 present the results using COD1 to measure firms’ borrowing costs, whereas Columns 3 and 4 show estimated results using COD2 to gauge the cost of debt. As reported, the estimators of Broadband are significantly positive in Columns 1 and 2, with significance at 1% levels, denoting that digital infrastructure leads to increased corporate borrowing costs. In addition, the estimators of Broadband are still significant and positive when we exploit COD2 to measure firms’ borrowing costs. Moreover, the magnitudes of the estimators on Broadband are also economically sizable. To be specific, digital infrastructure results in a 7.8% (9.17%) increase in firms’ borrowing costs measured by COD1 (COD2). Accordingly, our baseline result implies that digital infrastructure is statistically and economically significant and is positively related to firms’ borrowing costs, which supports that digital infrastructure is positively related to firms’ borrowing costs.
Credit
Yan Jiang (Shanghai University of Finance and Economics, China) Dayong Lv (Shanghai Lixin University of Accounting and Finance, China) Suyu Hao (Tongji University, China) Xiaokun Wei (Tongji University, China) Youyi Wu (The University of Chicago, Chicago, USA)
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