Government Digital Attention and Firms’ Debt Financing Costs: Evidence from Chinese Listed Firms

Amid the rapid proliferation of digitalization, reducing firms’ debt financing costs not only meets their funding needs but also promotes high-quality global economic growth. Using data from Chinese A-share listed firms from 2005 to 2022, we examine the impact of government digital attention on firms’ debt financing costs. Our empirical results demonstrate that the increase in government digital attention during the sample period significantly reduces the interest costs and financial costs of firms’ debt financing by 2.52% and 3.17%, respectively. Mechanism analysis reveals that government digital attention lowers these costs primarily through three channels: strengthening bank-firm relationships, facilitating firms’ digital transformation, and enhancing media attention. These findings reveal how government focus on digitalization effectively reduces firms’ debt financing costs, offering valuable insights for alleviating financing difficulties and improving capital market efficiency.