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Digital inclusive finance: A lever for SME financing?

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posted on 2024-02-19, 03:20 authored by Ya Bu, Xin Du, Yuting Wang, Shuyu Liu, Min Tang, Hui LiHui Li

This paper systematically investigates the relationship between digital inclusive finance and small and medium enterprises (SMEs) financing constraints. We extrapolate the influence model between them from an economic theory perspective and conduct an empirical test using two-way fixed effects and a mediation effect model. The results show: (1) Digital inclusive finance significantly alleviates the financing constraints of SMEs; (2) Compared to the breadth of coverage, the depth of use of digital inclusive finance has a more noticeable effect; (3) The alleviation effect of digital inclusive finance exhibits heterogeneity. It can correct the attribute mismatch, field mismatch, and regional mismatch of traditional financial loan services; (4) Digital inclusive finance alleviates SME financing constraints by reducing financing costs and controlling leverage levels, increasing internal sources of enterprise funds. This research is significant for promoting digital inclusive finance to alleviate the financing difficulties of SMEs in China and provides valuable solutions for other countries to mitigate the “Macmillan Gap” phenomenon.

History

Publication Date

2024-05-01

Journal

International Review of Financial Analysis

Volume

93

Article Number

103115

Pagination

11p.

Publisher

Elsevier

ISSN

1057-5219

Rights Statement

© 2024 The Authors. Published by Elsevier Inc. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/).

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