Digital Finance And Sustainable Corporate Finance Growth

From the "Giant Group" and "SanZhu" in the 90s to the exit of "LeEco" in 2020,there are numerous enterprises that have closed down due to excessive growth,and those that have shut down due to insufficient growth.As Higgins notes,there are as many companies going out of business because they are growing too fast as there are companies going out of business because they are growing too slowly.Clearly,sustainable financial growth is the only way to ensure a company’s longevity.According to Higgins,sustainable financial growth depends on the growth of equity and debt capital growing at the same rate,and the quality and efficiency of financial institutions,the main providers of debt capital,have a direct impact on sustainable financial growth.The rise of digital finance has revolutionized financial institutions from service quality to efficiency,and innovated the business model of financial institutions.Theoretically,the emergence of digital finance is conducive to sustainable corporate financial growth,but at the practical level,will digital finance promote sustainable corporate financial growth?This paper constructs a systematic theoretical analysis framework for the pertinence between digital finance and corporate financial sustainability,based on information asymmetry theory,financial sustainable growth theory,and financial function theory.We employed multiple regression analysis to empirically examine the pertinence between digital finance and corporate financial sustainability growth,utilizing the empirical data of Shanghai & Shenzhen A shares from 2012-2020 as the research sample.To ensure robustness,we replaced the variable measures,removed the effects of some factors and did PSM tests.The impact mechanism test of digital finance on sustainable corporate financial growth was analyzed empirically through the mediating effect model;In addition,in terms of the nature of ownership,company size and company type,looking at the impact of digital finance on the financial growth of sustainable companies.The results show that:(1)digital finance can significantly improve sustainable corporate financial growth,and it passes the robustness test.(2)By up-dimensioning the digital finance index to the level of three fine molecule indicators,indicators of the breadth and depth of digital finance make a remarkable contribution to the sustainable financial growth of businesses,while the degree of digital finance digitization does not have a significant contribution to sustainable corporate financial growth.(3)The test of the mediating mechanism between digital finance and sustainable corporate financial growth finds that digital finance plays a positive role in sustainable corporate financial growth through three channels: alleviating corporate financing constraints,increasing corporate risk-taking level and improving corporate operating income level.(4)The results of the heterogeneity analysis show that among non-state owned enterprises and high-tech enterprises,the contribution of digital finance to sustainable corporate financial growth is stronger.Based on the above conclusions,We suggest three recommendations from the government,financial institutions,and enterprises: to boost investment in digital "technology" and hasten the execution of related policies;to fortify the profound integration of business and technology and enhance the excellence of digital financial services;to accept digital finance with an open mindset and bolster the digital construction of businesses themselves.