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Impact of Traditional and Digital Financial Inclusion on Enterprise Innovation: Evidence from China

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  • Kangyu Ren
  • Yuan Wang
  • Lulu Liu

Abstract

Financial inclusion refers to a process that ensures the ease of access, availability, and usage of the financial system for all members of an economy. This paper aims to study financial inclusion’s impact on enterprise innovation and compare the different effects of traditional and digital financial inclusion. Existing papers mainly focus on digital financial inclusion’s influence. Based on China’s data, this paper fills the gap by constructing an index system to measure traditional financial inclusion and discussing the impact mechanism of the two kinds of financial inclusion on enterprise innovation (output and efficiency). The results illustrate that traditional financial inclusion inhibits the innovation output of enterprises, while digital financial inclusion has a positive effect. However, both traditional and digital financial inclusion is still in the stage of constraining the innovation efficiency of enterprises. Moreover, the two types of financial inclusion function differently for enterprises of different sizes and ownership. Evidence from China is expected to reveal the features of this relationship and inspire research in more economies.

Suggested Citation

  • Kangyu Ren & Yuan Wang & Lulu Liu, 2023. "Impact of Traditional and Digital Financial Inclusion on Enterprise Innovation: Evidence from China," SAGE Open, , vol. 13(1), pages 21582440221, January.
    • Handle: RePEc:sae:sagope:v:13:y:2023:i:1:p:21582440221148097
    DOI: 10.1177/21582440221148097
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    Cited by:

    1. Jinqi Su & Changhong Dong & Ke Su & Lin He, 2023. "Research on the Construction of Digital Economy Index System Based on K-means-SA Algorithm," SAGE Open, , vol. 13(4), pages 21582440231, December.
    2. R. V. Naveenan & Chee Yoong Liew & Ploypailin Kijkasiwat, 2024. "Nexus Between Financial Inclusion, Digital Inclusion and Health Outcomes: Evidence from Developing Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(1), pages 367-408, August.

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