| Innovation as a key source of key technologies has become a strategic support for China’s productivity and the country’s all-round empowerment.For enterprises,technological innovation is at the heart of development and a source of growth in competitiveness and efficiency.Small and medium-sized enterprises(SMEs)are important players in the economy and even more important players in innovation.Improving their level of innovation is not only beneficial for them,but is also essential for building a modern economic system and for boosting China’s growth and competitiveness.However,due to the specific nature of innovation projects,characterized by long lead times and high risks,SMEs of limited size have low innovation performance and a poor innovation environment,and suffer from severe funding and innovation constraints.The emergence of digital financing has overcome these constraints.By combining traditional finance and digital technology,digital finance overcomes time and space constraints,lowers the threshold for financial services and operating costs,helps SMEs to alleviate financing difficulties and stimulates their innovative development.From the perspective of micro market players,this paper measures the innovation ability of enterprises by the intensity of enterprises’ R&D investment,and measures the development level of digital finance by the Peking University Digital Inclusive Finance Index.A total of 495 listed enterprises in the small and medium-sized board and the GEM that meet the "Standards for Small and Medium-sized Enterprises" from2011 to 2020 are selected.This paper explores the channels and effects of digital finance on small and medium-sized enterprises,and further conducts sub-sample regression according to enterprise attributes and regional differences from two levels of industry and region to explore the heterogeneity of incentive effects of digital financial innovation.The following conclusions are drawn from the analysis: First,digital finance has a significant impact on SMEs’ technological innovation and all three dimensions-breadth of coverage,depth of use and digitization-contribute to improving SMEs’ innovation capacity,but the leverage effect of strengthening breadth of coverage and depth of use is stronger.Second,digital finance can have a positive impact on the innovation of small and medium-sized enterprises by alleviating financing constraints and reducing corporate leverage.Third,digital finance has a greater impact on fostering SME innovation in high-tech sectors;Fourth,digital finance has a greater impact on fostering SME innovation in regions with a high-quality institutional environment.Fifth,the improvement of the credit environment can strengthen the promotion effect of digital finance on the innovation of small and medium-sized enterprises.Based on the results of the study,it is recommended that the government should strengthen the digital technology base and improve the digital financing system;improve the quality of the institutional environment and coordinate the level of development of digital financing instruments across regions;address the heterogeneity of enterprises and adopt targeted policies;Strengthen the establishment of a culture of social credit,improving legislation on social credit reporting.Financial institutions are encouraged to digitally modernize traditional businesses,innovate in digital financial products and services and develop the SME market.SMEs are encouraged to strengthen their self-development and take full advantage of the dynamism of their innovative core business structure;to seize opportunities for innovation and development,to progressively foster the digital transformation of businesses and to use digital finance to support their development. |
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