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Digital financial capability and entrepreneurial performance

Author

Listed:
  • Luo, Yu
  • Peng, Yuchao
  • Zeng, Lianyun

Abstract

Utilizing the 2017 China Household Finance Survey (CHFS) data, this paper is among the first to define and measure digital financial capability (DFC), showing that it has significant and positive influence on business ownership, business innovation and financial performance. The results still hold after addressing endogeneity. Furthermore, we illustrate how DFC impacts entrepreneurial performance through sale, borrowing and investment channels. In addition, heterogeneity examinations show that improvement of DFC can benefit vulnerable populations more, especially those in rural or less-developed areas. This study calls attention to recognizing the importance of DFC for micro businesses in the digital era, and provides implications concerning both employment and economic inclusion policies for countries which might go through similar stages.

Suggested Citation

  • Luo, Yu & Peng, Yuchao & Zeng, Lianyun, 2021. "Digital financial capability and entrepreneurial performance," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 55-74.
    • Handle: RePEc:eee:reveco:v:76:y:2021:i:c:p:55-74
    DOI: 10.1016/j.iref.2021.05.010
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    More about this item

    Keywords

    Digital financial capability; Entrepreneurial performance; Business ownership; Business innovation; Financial performance;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

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