The Impact Of Digital Finance On Corporate Financing Constraints

The Fourteenth Five Year Plan outlines the need of high-quality employment and improvement of city and county residents’ income,promoting healthy economic development and aiming to build a strong economic development country.As the backbone of the real economy,enterprise development plays an important role in the process of economic development.However,due to market friction,information asymmetry and many other practical factors,enterprises experience the torture of difficult and expensive financing through the whole process of raising funds for their own development,which also affects the achievement of economic power.Financial institutions,as the intermediary of social financing,have an important impact on corporate financing.Therefore,the government has always been concerned about the quality and effect of financial services for the real economy and issued a series of policies to encourage banks and other financial institutions to promote support for corporate credit.But the traditional financial institutions have an obvious preference to provide services for the wealthy,causing more credit resources flowing to the leading enterprises which only possess a small proportion in the financing market.And it also makes the financing needs of long tail groups such as SMEs and private enterprises unable to be met in time.In order to crack this financial discrimination,the government vigorously promotes inclusive finance.Digital finance also begins to play an important role in enterprise financing because of its inclusiveness virtue,sustainability and operability.In particular,beacause of providing financial services through digital technology,digital finance not only can break through the limitations of traditional financial services for the real economy,dimishing the degree of information dissymmetry between the funding provisioners and demanders,but also provide low-cost online financing channels for enterprises,so as to help enterprises jump out of the difficult and expensive financing trap.Therefore,based on the dual perspectives of financing difficulty and financing expensive,this paper places study keynote on the mechanism between digital finance and company financial constraints,as well as analyzes whether the heterogeneity impact of digital finance towards financing constraints exists under different characteristics of enterprises and external environment.Firstly,this paper reorganizes revelant literature about digital finance and corporate financing constraints,defining the research subject and describing the existing research progress.And then in order to conclude the causes of corporate financing constraints and corporate financing channel preferences,paper reviews the information asymmetry theory,principal-agent theory,pecking order financing theory and financial exclusion theory.After finishing the literature review and theoretical review,this paper disscusses the mechanism channels between digital finance and financial constraints,listing relative assumptions according to the practical situation of digital finance and company financing.Finally,take the data of Shanghai and Shenzhen A-stock companies from 2011 to 2020 as the research sample and use the fixed effect model to verify whether the research hypothesis valid or not.The research finds that:(1)Both the total digital financial indicators and two-dimensional sub indicators are negatively related to corporate financing constraints.(2)Digital finance alleviates financing constraints by lowing down the threshold of financing,cutting down the finance cost of debt and equity.Among these three channels,debt financial cost has the biggest intermediary effect and is the main influence channel.(3)Government intervention could weaken the digital finance positive effect on financial constraints.(4)According to the internal characteristics of enterprises and external environmental factors,the group regression study shows that private enterprises,high digital level enterprises and those in economically backward regions and traditional financial underdeveloped regions could get more benefit from digital finance when it comes to financing constraints.In addition,coverage and depth of digital finance are more effective in economically developed regions,while coverage and digital construction are more effective in economically backward regions.And financial supervision is conducive to the longterm development of digital finance.Finally,based on the empirical research conclusions,this paper puts forward the following suggestions: First,enterprises should speed up digital construction,use digital technology to improve production and operation efficiency as well as internal governance level.By doing so,the information transparency and company competitive strength could get promoted,which optimizes the efficiency of digital finance collecting information and lowering information dissymmetry.Second,to standardize the development of digital finance,the government should pay attention to the difference between supervision and improper intervention towards the economy by administrative means,clarifying the supervision scope and using digital technology to update supervision means,finally realizing real-time dynamic intelligent supervision.Third,adjust digital finance development method according to local conditions.under local actual conditions,focus on promoting the digitalization of financial institutions and the cultivation of digital finance usage habits and the construction of digital infrastructure,so as to maximize the reduction effect of digital finance on enterprise financing constraints,improving the serving quality of digital finance.