Digital inclusive finance, financial mismatch and the innovation capacity of small and medium-sized enterprises: Evidence from Chinese listed companies. Issue 2 (February 2023)

• Record Type: Journal Article
• Authors: Li, Wenqi; Pang, Wenbin
• Is Part Of: Heliyon. Volume 9:Issue 2(2023)
• Publication Date: 2023-02
• Subjects: Digital inclusive finance -- Small and medium-sized enterprises -- Technological innovation -- Financial mismatch; SMSEs Small and Medium-sized enterprises -- ADB Asian Development Bank -- R&D Research and Development; Research -- Periodicals; Medical sciences -- Periodicals; Natural history -- Periodicals; Social sciences -- Periodicals; Earth sciences -- Periodicals; Physical sciences -- Periodicals; 507.2
• DOI: 10.1016/j.heliyon.2023.e13792
• Languages: English
• ISSNs: 2405-8440

Abstract

Abstract: As the main driver of innovation, enterprises can effectively promote the level of social innovation. This paper incorporates digital inclusive finance into the research framework of innovation in Small and Medium-sized enterprises, and investigates the impact of digital inclusive finance on the innovation ability of Small and Medium-sized enterprises through theoretical and empirical analyses. The theoretical analysis finds that digital inclusive finance can compensate for the "long-tail effect" in the financing process and help enterprises obtain financing loans. In terms of empirical analysis, this paper has conducted empirical tests by selecting the innovation data of Chinese A-share listed companies from 2010 to 2021, and the results show that: (1) Digital inclusive finance still has a facilitating effect on the technological innovation capability of Small and Medium-sized enterprises after the robustness test. (2)The mechanism evaluation finds that the digital inclusive finance segmentation indicators, i.e., the depth of use, the breadth of coverage and the degree of digitalization, are also important ways to enhance the technological innovation capability of Small and Medium-sized enterprises. (3)The innovative introduction of financial mismatch variables reveals that the financial mismatch problem in the financial market has a suppressive effect on the technological innovation capability of Small and Medium-sized enterprises. (4)Further analysis of the mediation effect of digital inclusive finance reveals that digital inclusive finance can effectively correct the financial mismatch problem in the traditional financial model and promote the technological innovation capability of Small and Medium-sized enterprises. This paper enriches the analysis of the economic effects of digital inclusive finance, while providing Chinese empirical support for digital inclusive finance to promote the innovation ability of Small and Medium-sized enterprises. Highlights: This paper attempts to examine whether the financial mismatch problem that exists in the traditional financial industry has an impact on enterprises innovation by analyzing it. Combining macro-finance perspectives with micro-individuals, we study the impact of digital development of finance on enterprises innovation. Based on the analysis of the impact of digital inclusive finance on firms' innovation capacity, we analyze whether there is a mediating effect of financial mismatch.