Development Of Digital Finance And Inefficient Investment Of SMEs

China’s economy has entered a stage of high-quality development now,although the problems existing in the past have not been completely solved,the development of science and technology also provides some new ideas.Through observation,it can be seen that China is facing increasing downward pressure of economy under the new normal,and SMEs(small and medium-size enterprise),as a very important micro component of China’s economy,face heavy obstacles in the process of financing,and their investment behavior is also affected,which has a great negative effect on the high-quality development of China’s economy;However,at the same time,the emergence and improvement of various underlying technologies of fintech have impacted the traditional financial formats.In this context,exploring the relationship between the development of digital finance and the investment efficiency of enterprises is of great significance to fully understand the impact of the development of digital finance on the real economy,and how to make full use of this new form to drive the economic leap.Therefore,this article uses discussion and empirical research to conduct indepth research on the effect of digital finance on the investment effectiveness of SMEs.around the following questions:(1)Can the development of digital finance curb the current inefficient investment situation of SMEs in China to a certain extent?(2)If such a containment effect exists,what are the effects of different dimensions of digital finance in this process? how does it work? Is the effect generalizable to the study sample?(3)What are the different effects on enterprises with different characteristics in this process? Based on important domestic and international literature and research,theoretical and practical analysis,utilizing literature and research technique and empirical research method,is conducted in light of the aforementioned issues,this paper carries out research from multiple dimensions.Firstly,this paper verifies the role of digital finance in restraining the inefficient investment phenomenon of SMEs,that is,with the improvement of the development level of digital finance,the deviation of investment efficiency of SMEs from its optimal level can be improved,and digital degree and coverage breadth plays the most obvious role in the process of alleviating inefficient investment of SMEs;At the same time,this role mainly focuses on alleviating the underinvestment of enterprises.Secondly,this paper explores the heterogeneity in the process of digital finance affecting the investment efficiency of SMEs from two different perspectives: the property right nature of the actual controller of the enterprise and the geographical distribution of the enterprise.Compared with state-owned enterprises,the inefficient investment behaviors of private SMEs are more obviously constrained;the eastern area of China has seen a greater reduction in the amount of inefficient investment by companies.This paper also discusses the path of digital finance affecting the investment efficiency of SMEs.It can be seen from the research that the development of digital finance has partially lifted the restrictions on SMEs’ access to external financing,thus improving the situation of underinvestment of enterprises.Moreover,this study discovers that the degree of digital finance development is adversely connected with underinvestment in inefficient investment when the level of financing limitations for businesses is high.The recommendations listed below are based on the findings of empirical investigation: good laws and regulations,introduce supportive policies,reasonably open the use of credit data,strengthen the construction of our country’s credit system;To guide and standardize the development of financial institutions and build a multilevel digital financial service system;Improve the digital financial supervision system and methods to prevent new financial risks;Enterprises accelerate digital transformation and actively promote cooperation with digital financial institutions.