Digital Inclusive Finance, Financing Constraints, and Technological Innovation of SMEs—Differences in the Effects of Financial Regulation and Government Subsidies

Deepening the development of digital inclusive finance, dredging the impact of digital inclusive finance on the innovation path of small and medium-sized enterprises (SMEs), and strengthening financial supervision and government support are of great significance to promoting the technological innovation of SMEs. This paper selects listed companies on the New Third Board as research samples and analyzes and empirically tests the relationship between digital inclusive financial and technological innovation of small and medium-sized enterprises. The results show that digital inclusive finance can significantly promote the technological innovation level of SMEs, especially the higher the degree of digitalization, the more obvious the promotion effect. Upon further testing, it was more pronounced in the sample of high-tech industries and eastern SMEs. Digital inclusive finance can effectively alleviate the financing constraints of SMEs, thereby promoting the technological innovation of SMEs. Reasonable financial supervision and adaptive government subsidies have a positive regulating effect on the innovation incentive effect of digital inclusive finance.

Promoting or Inhibiting? Digital Inclusive Finance and Cultural Consumption of Rural Residents

Improving the cultural consumption level of rural residents is of great practical significance to help revitalize rural culture and achieve common prosperity. Based on this, this study empirically examines the role and impact mechanism of digital inclusive finance on enhancing the cultural consumption of rural residents using panel data of 30 provinces across China from 2011 to 2020. The results show that: (1) Digital inclusive finance can significantly improve the cultural consumption level of rural residents. After a robustness test and endogenous analysis, this conclusion is still stable. (2) Digital inclusive finance significantly improves the cultural consumption level of rural residents through three paths: raising the income level of farmers, promoting the level of urbanization, and improving the level of financial development. (3) Heterogeneity analysis shows that the breadth of digital inclusive financial coverage can significantly improve the cultural consumption level of rural residents, but the depth of digital inclusive financial use and the degree of digitization do not show an enhancing effect;the development of digital inclusive finance in the eastern area has a significant role in promoting the cultural consumption level of rural residents, but the role is not significant in the central and western areas.

Measuring the impact of Wuhan's COVID-19 lockdown on the growth enterprise market in China

The outbreak of COVID-19 had a huge impact on the financial market. As a new growth point in China, it's necessary to study how SMEs (small and medium-sized enterprises) represented by listed companies on the GEM (growth enterprise market) can withstand sudden shocks. This paper examines the impact of Wuhan's COVID-19 lockdown on the financial markets based on the data of GEM listed companies and the method of event analysis. The results show that investors had a great response to epidemic related news. Compared with the interest rate cut policy, the targeted RRR reduction policy had a more significant positive influence on the financial markets. Furthermore, in the early stages of COVID-19, there was not a significant effect of distance on the firms' CARs (cumulative abnormal returns). In an improving epidemic environment, the farther the firms were from Wuhan City, the more positive the impact on their CARs would be. This paper provides new evidence and important enlightenment for preventing the impact of public health emergencies on the GEM market and highlights the significance of developing digital inclusive finance, which can mitigate regional risk and financing issues. Copyright © 2023 Wang, Huang and Wang.

Digital inclusive finance and rural household subsistence consumption in China

This paper examines the impact of digital inclusive finance (DIF) on the subsistence consumption of rural households in China. We find that rural residents in areas with well-developed DIF tend to have greater subsistence consumption. Channel analyses show that such a fact can be explained by the income growth effect and vulnerability mitigation effect created by DIF. The income growth effect is manifested as that the development of DIF promotes rural residents’ income by stimulating either their entrepreneurship to earn operational income or their rural-to-urban migration to earn wage income. Meanwhile, the vulnerability mitigation effect uncovers that DIF could reduce rural residents’ future income uncertainty by alleviating the impact of exogenous shocks. Furthermore, we apply Lasso algorithms to predict expected consumption, and find that the development of DIF is associated with a higher probability of rural households’ overconsumption, and that such side effect mainly occurs among individuals with weak time preferences. Therefore, the development of DIF should be promoted, because doing so is beneficial to increasing rural residents’ economic resilience and building an inclusive, sustainable and prosperous society in the post-COVID-19 era.

How Can the Financing Constraints of SMEs Be Eased in China?-Effect Analysis, Heterogeneity Test and Mechanism Identification Based on Digital Inclusive Finance

Due to the impact of COVID-19 and other factors, SMEs are increasingly facing the contradiction of financing constraints. In order to explore feasible ways to ease the financing constraints of SMEs, we further incorporate digital inclusive finance into the analytical framework of financing constraints of SMEs, and test the causal relationship between them by using models such as two-way fixed effects model and moderated intermediary effect model. We find that digital inclusive finance can effectively alleviate financing constraints of SMEs, and this phenomenon is particularly significant in private enterprises and family enterprises. In addition, the mitigation effect of digital financial inclusion is more like icing on the cake, and it cannot provide practical assistance to small and medium-sized enterprises with poor business conditions. Further research also finds that commercial credit seems to be an effective channel for digital financial inclusion to alleviate financing constraints of SMEs, but corporate leverage also plays an important role in this process, playing a negative moderating role. In general, our study strengthens the effectiveness of digital inclusive finance in alleviating financing constraints of SMEs, at the same time, confirming the existence of commercial credit channels and the moderating effect of enterprises’ lever ratio and providing a feasible direction for alleviating financing constraints of enterprises. Copyright © 2022 Li, Wei and Guo.