Research On The Impact Of Digital Finance On Financing Constraints Of Small And Medium Enterprises

With the emergence of new digital technologies,the economy and society have entered the digital era and the traditional financial industry is gradually being transformed and upgraded,resulting in the emergence of digital finance.With the support of Internet platforms,digital finance uses big data technology to access massive amounts of data,accurately assess users’ credit levels,identify customer needs,provide personalised financial services,and bring new opportunities to the development of small and medium enterprises(SMEs)by broadening the breadth of services,reducing transaction costs and improving risk control capabilities.As the "long tail" of China’s enterprises,SMEs bear an important responsibility in promoting economic growth,increasing fiscal revenue,promoting employment and technological innovation,and are an important force for economic development.However,SMEs in China generally face financing constraints,especially the difficulty and cost of financing,which restrict their survival and development.Digital finance has the feature of de-intermediation,which lowers the financing barriers for SMEs and helps solve the problem of difficult and expensive financing.Based on theories of long tail,information asymmetry,credit rationing and transaction costs,this thesis constructs a regression model to empirically test the impact of digital finance on SMEs’ financing constraints,using a sample of SMEs listed on the SME and GEM boards from 2012 to 2020,and further deepens this impact in three dimensions: breadth of coverage,depth of use and degree of digitisation.In terms of the mechanism of action,the influence mechanism of digital finance on SMEs’ financing constraints is explored through two channels: financing availability and financing cost.In terms of heterogeneity analysis,the total sample is grouped according to the nature of property rights and technological attributes to examine the variability of digital finance’s impact on SMEs’ financing constraints.Finally,robustness tests are conducted using replacement indicators and excluding special samples.The study concludes the following:(1)Digital finance significantly alleviates SMEs’ financing constraints.By dimension,the relief effect of breadth of coverage is most prominent compared to depth of use and digitalisation.(2)Analysis of the mechanism of action shows that digital finance effectively alleviates SMEs’ financing constraints through two paths: increasing the availability of finance and reducing the cost of finance.(3)Heterogeneity tests show that digital finance has a significant negative effect on the financing constraints of non-state and high-tech enterprises compared to state-owned and non-high-tech enterprises.In summary,this thesis proposes specific countermeasures from three perspectives: the government,enterprises and financial institutions to give full play to the advantages of digital finance in China and alleviate the financing constraints of SMEs,as follows:(1)the government should promote the development of digital finance;(2)SMEs should make full use of digital finance,strengthen credit management and information disclosure,and seek multiple financing channels;(3)financial institutions should pay attention to digital transformation,innovate financial products,optimise service processes and maintain close cooperation with SMEs.