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Digital financial capabilities and household entrepreneurship

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  • Yu Luo
  • Lianyun Zeng

Abstract

This study investigates the impact of digital financial capabilities on household business ownership and business innovation. Utilising the 2015 China Household Finance Survey (CHFS) data, this paper constructs robust capabilities scores and finds positive associations between digital financial capabilities and household entrepreneurship. After specifying instrumental variables, the results still hold. In addition, we compare the driving forces of the impact through componential dimensions, and discuss the different function channels that digital financial capabilities affect business ownership and business innovation. What’s more, we add the interaction term of digital capability and financial capability, illustrate its role in improving the goodness of fit of the models, and further discuss the interaction effect both generally and at each level of the capabilities scores. Finally, we conduct robustness checks across socioeconomic groups and provide policy implications. This study highlights the different function channels of digital financial capabilities concerning different entrepreneurial activities, as well as the importance of interaction effect in understanding how digital financial capabilities affect household entrepreneurship.

Suggested Citation

  • Yu Luo & Lianyun Zeng, 2020. "Digital financial capabilities and household entrepreneurship," Economic and Political Studies, Taylor & Francis Journals, vol. 8(2), pages 165-202, April.
    • Handle: RePEc:taf:repsxx:v:8:y:2020:i:2:p:165-202
    DOI: 10.1080/20954816.2020.1736373
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    Citations

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    Cited by:

    1. Gao, Jingyi, 2022. "Has COVID-19 hindered small business activities? The role of Fintech," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 297-308.
    2. 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.
    3. Mao, Fengfu & Wang, Yuanfan & Zhu, Mengsi, 2023. "Digital financial inclusion, traditional finance system and household entrepreneurship," Pacific-Basin Finance Journal, Elsevier, vol. 80(C).
    4. Shao, KaiChao & Ma, Ruixue & Kamber, Joseph, 2023. "An in-depth analysis of the entrepreneurship of rural Chinese mothers and the digital inclusive finance," Telecommunications Policy, Elsevier, vol. 47(7).
    5. Jin, Laiqun & Dai, Jiaying & Jiang, Weijie & Cao, Kairui, 2023. "Digital finance and misallocation of resources among firms: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 66(C).
    6. Chong, Zhaohui & Wei, Xiaolin, 2023. "Exploring the spatial linkage network of peer-to-peer lending in China," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 630(C).
    7. Li, Jingwen & Wang, Haoliang & Soh, WeiNi, 2024. "Digital transformation, financial literacy and rural household entrepreneurship," Finance Research Letters, Elsevier, vol. 62(PB).
    8. He, Qing & Li, Xiaoyang, 2020. "The failure of Chinese peer-to-peer lending platforms: Finance and politics," BOFIT Discussion Papers 27/2020, Bank of Finland Institute for Emerging Economies (BOFIT).
    9. Zhao, Chunkai & Wang, Yuhang & Ge, Zhenyu, 2023. "Is digital finance environmentally friendly in China? Evidence from shared-bike trips," Transport Policy, Elsevier, vol. 138(C), pages 129-143.
    10. Azra Zaimovic & Anes Torlakovic & Almira Arnaut-Berilo & Tarik Zaimovic & Lejla Dedovic & Minela Nuhic Meskovic, 2023. "Mapping Financial Literacy: A Systematic Literature Review of Determinants and Recent Trends," Sustainability, MDPI, vol. 15(12), pages 1-30, June.
    11. He, Qing & Li, Xiaoyang, 2021. "The failure of Chinese peer-to-peer lending platforms: Finance and politics," Journal of Corporate Finance, Elsevier, vol. 66(C).
    12. He, Qing & Li, Xiaoyang, 2020. "The failure of Chinese peer-to-peer lending platforms : Finance and politics," BOFIT Discussion Papers 27/2020, Bank of Finland, Institute for Economies in Transition.
    13. repec:zbw:bofitp:2020_027 is not listed on IDEAS
    14. Silin Liu & Jia He & Dingde Xu, 2023. "Understanding the Relationship between Financial Literacy and Chinese Rural Households’ Entrepreneurship from the Perspective of Credit Constraints and Risk Preference," IJERPH, MDPI, vol. 20(6), pages 1-15, March.

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