The Digital Inclusive Finance and Investment Efficiency of Enterprises: Evidence from Perspective of Financialization

Abstract

Digital inclusive finance, a byproduct of traditional banking and digital technology, has a substantial effect on the financial standing of businesses. Using information from Chinese A-share listed firms between 2011 and 2018, this paper empirically investigates the connection between the emergence of digital financial inclusion and investment efficiency and financialization of real enterprises, as well as their underlying mechanisms. The results show that digital financial inclusion rises a suppressive effect on the investment efficiency of enterprises. Further, this effect is influenced by other control factors. The mechanism test shows that digital financial inclusion enhances the process of financialization of corporations. Findings of this paper help clarify the mechanism of the role of digital inclusive finance. Based on the empirical findings, this paper recommends controlling the unrestricted promotion of digital inclusive finance but encouraging balanced expand.