The Impact of Digital Financial Inclusion on Financing Constraints: Evidence from China’s A-share Listed Companies

Abstract

This study examines the impact of digital financial inclusion on financing constraints encountered by corporates, using all of China’s A-share listed companies from 2011 to 2020 as the research sample. This study finds that the development of digital inclusive finance has a positive effect on all enterprises in alleviating financing constraints. Through the heterogeneity test, we find that digital inclusive finance is more effective in alleviating financing constraints for state-controlled enterprises, large-scale enterprises, enterprises in developed cities and enterprises in the technology industry. The mechanism analysis finds that digital inclusive finance alleviates corporate financing constraints by alleviating corporate information asymmetry. This study inspires enterprises to alleviate financing constraints.