Author(s)

Yuqing Li, Jingtong Yu, Haoen Li

Corresponding Author

Jingtong Yu

ABSTRACT

Digital finance, as an emerging form from the integration of finance and technology, has an important impact on the real economy. Financing constraint such as limited credit availability and high financing cost has long been an issue that brings serious consequences to enterprises in China. By using the data of A-share listed firms in Shanghai and Shenzhen stock markets and the digital finance inclusive index published by Peking University, an empirical model is established to gain an insight into what impact digital finance has on financing constraints regarding its breadth of coverage. At the same time, this paper makes further heterogeneity analysis from the perspective of enterprise size, adds interaction terms for regression analysis, and carries out a robustness test to confirm the conclusion. The empirical results show that the wider digital finance covers geographically, the stronger the mitigating effect on financing constraints. In its early development stage, digital finance benefits more to large enterprises, but with its continuous improvement, it will gradually eliminate size discrimination. The above conclusion still holds after the robustness test. The research results will assist in guiding the development of digital finance and strengthening its ability to serve the real economy.

KEYWORDS

Digital Finance, Financing Constraints, Enterprise Size