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Can digital finance boost SME innovation by easing financing constraints?: Evidence from Chinese GEM-listed companies

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  • Lianying Yao
  • Xiaoli Yang

Abstract

This paper summarizes the transmission chain of “digital finance-financing constraint-firm innovation” at the theoretical and practical levels, incorporates digital finance into the empirical analysis framework of firm innovation, selects the data of Chinese GEM(Growth Enterprise Market)-listed companies from 2011 to 2020, and matches the data of the digital inclusive finance index. The paper empirically examines the incentive effect and impact mechanism of digital finance on SME innovation through the two-way fixed-effects model and mediated-effects model by matching the data of China GEM-listed companies from 2011 to 2020 with the digital financial inclusion index data. The findings show that the digital development and promotion of digital finance play a significantly positive impact in helping SMEs innovate and stimulate innovation. The effect is realized by alleviating corporate financing constraints. Further, digital finance has different incentive effects on enterprises with varying rights of property nature, as well as on other regions.

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  • Lianying Yao & Xiaoli Yang, 2022. "Can digital finance boost SME innovation by easing financing constraints?: Evidence from Chinese GEM-listed companies," PLOS ONE, Public Library of Science, vol. 17(3), pages 1-20, March.
    • Handle: RePEc:plo:pone00:0264647
    DOI: 10.1371/journal.pone.0264647
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    14. Li, Xin & Shao, Xuefeng & Chang, Tsangyao & Albu, Lucian Liviu, 2022. "Does digital finance promote the green innovation of China's listed companies?," Energy Economics, Elsevier, vol. 114(C).
    15. Amar Johri & Mohammad Asif & Preeti Tarkar & Waseem Khan & Rahisha & Mohammad Wasiq, 2024. "Digital financial inclusion in micro enterprises: understanding the determinants and impact on ease of doing business from World Bank survey," Palgrave Communications, Palgrave Macmillan, vol. 11(1), pages 1-10, December.
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