Fintech and dynamic adjustment of capital structure

The rapid advancement of financial technology (Fintech) has notably alleviated the information asymmetry challenges faced by firms in the financial market. Drawing upon a comprehensive sample of listed firms in China, we find that Fintech speeds up the adjustment towards the target capital structure, and this acceleration derives from improved information transparency, alleviated financing constraint, and heightened bank competition. We also find that Fintech has a more significantly positive impact on capital structure adjustment among firms with lower agency costs. Moreover, when capital structure is higher the target and the firm is in high-competition industry, the adjustment occurs more promptly.