The Innovation of Financial Digitalization Enhances the Financing Capability of Small and Medium-Sized Enterprises: An Empirical Study

Abstract

In recent years, severe financing constraints restrict the development of SMEs (small and medium-sized enterprises) and the use of digital finance can play a greater role in the financing of SMEs. This paper conducts research through the empirical analysis method. Based on the existing research findings, the financing constraints of SMEs show a strong cash-cash flow sensitivity. So this paper build a cash-flow sensitivity model to measure financing constraints and add digital finance data variables to explore the impact of digital finance on SMEs’ financing constraints. Then Stata 15.0 statistical software was used to carry out descriptive statistics, correlation analysis, regression analysis, and robustness test. The results show that there are financing constraints in SMEs, and the financing constraints of SMEs are alleviated after joining the digital finance system, which shows that the financing constraints of SMEs can be effectively improved by the digital finance system, but the ability to innovate and empower needs to be improved. The development of digital finance can cut through the data islands, reduce moral risk, rich financing channels, and financing costs indirectly reduced.