Research On The Impact Of Digital Inclusive Finance On Business Performance

Finance is an economic activity in which market entities allocate resources and obtain capital financing across time and space through financial instruments.However,traditional financial services often face issues such as high barriers to entry,high costs,and low efficiency,which can hinder the effective supply and demand of capital.As a new financial model,digital finance uses emerging technologies to provide targeted and accurate financial services,effectively addressing the financing difficulties,high costs,and slow financing processes faced by capital demanders.Additionally,it reduces the investment and lending risks for capital suppliers,thereby partially overcoming the challenges of traditional finance.In the context of China’s commitment to opening up its economy and building a new“double-cycle” development pattern,enterprises have played a critical role in driving economic growth.Therefore,it is crucial to pay close attention to the business activities and performance of enterprises.Examining whether digital finance can effectively promote the production and operation of enterprises and improve their business performance is key to achieving high-quality economic development.By using A-share listed enterprises as samples,this thesis aims to investigate the relationship between digital finance and business performance over a 10-year period from2011 to 2020.The development level of digital finance is measured using city-level data of the digital inclusive finance index released by Peking University,while the Tobin Q value is used as a proxy variable for business performance.The study first conducts a empirical regression analysis on 15350 annual observations to examine the promotion effect of digital finance development and its three sub-dimensions on business performance.Secondly,a stepwise test regression coefficient method is utilized to analyze the transmission mechanism of information transparency,financing cost,and cash liquidity.Thirdly,heterogeneity tests are conducted to assess the effect of digital finance development on business performance under different scales,property rights,and regional conditions.Finally,robustness tests are carried out to ensure the reliability of the conclusions.These include lag effect tests,replacement of explained variables,and elimination of outliers.This thesis presents the following conclusions: firstly,the expansion of digital finance and its three sub-dimensions have a favorable impact on business performance.Secondly,the development of digital finance can enhance the business performance of companies by boosting information transparency,decreasing financing costs,improving cash liquidity,and other factors.Thirdly,compared to large state-owned enterprises,the growth of digital finance has a more noticeable effect on the operational performance of small and private enterprises.Furthermore,the development of digital finance has a more substantial impact on improving the business performance of businesses in the eastern region when compared to those in the central and western regions.Based on the research results,this thesis puts forward the following five policy recommendations: understand the value of digital technology to enterprises;pay attention to the inclusive value of digital finance to small-scale private enterprises;coordinate the development of all dimensions of digital finance;encourage macro policies to promote the development of digital finance;strengthen the digital financial supervision system.