Research On The Impact Of Digital Financial Inclusion On The Resilience Of SMEs

SMEs play an important strategic role in China’s economic development and are an important part of the country’s economy.SMEs are a key force in the process of maintaining market pillars and employment,and make a significant contribution to the overall improvement of the stability of the industrial chain and international competitiveness,and are also a strong support for building a new development model.However,the combined effects of many factors such as geopolitical conflicts,a weak real estate investment market,slowing consumption growth and a weak global economic recovery are putting China’s economic and social development under greater downward pressure.Small and medium-sized enterprises,due to their small size,weak capital chain and financing constraints,have faced difficulties,resulting in a lower level of enterprise resilience and high survival pressure compared to large enterprises.With the continuous development and widespread application of digital technologies such as artificial intelligence,big data,cloud computing and blockchain,various digital financial services are continuously being introduced in the financial sector,and digital finance,with its in-depth extraction and full exploitation of big data financial information,is playing a continuous role in achieving financial inclusion services.This opens a new avenue to improve the resilience of SMEs,which are excluded from the traditional financial system due to the lack of credit data information.Drawing on theories related to digital inclusive finance and SME development,this thesis explores the impact of digital inclusive finance on SME resilience,based on the development of an SME resilience assessment framework.The literature review and theoretical analysis stage systematically organises the results of research conducted by different scholars at home and abroad on digital inclusive finance,SME resilience and organisational resilience.On this basis,the connotation of SME resilience and the mechanism of the role of digital inclusive finance in SME resilience are analysed.In the empirical research part of this thesis,SME resilience is measured along four dimensions: defensiveness,resilience,recoverability and growth,and a comprehensive SME resilience index is constructed using the entropy weight method.Based on data availability,data on listed companies included in the CSI 1000 index from2011 to 2020 are selected as the study sample to measure the level of resilience of SMEs.On this basis,the "Beida Digital Inclusive Finance Index" is used as a quantitative indicator of the level of development of digital inclusive finance,and a two-way fixed model is used to study the impact of digital inclusive finance on SME resilience.In addition,a robustness test is conducted using the reduced-tail and reduced-year methods,and heterogeneity analysis is performed with respect to firm equity and regression nature.This thesis concludes that: first,digital inclusive finance can improve the resilience of SMEs.There is a significant link between digital inclusive finance and SMEs’ resilience and defensiveness indicators,while the link with resilience and innovativeness is relatively weak.By integrating and developing inclusive finance and digital technologies,they widen financing channels and reduce transaction costs for SMEs,which facilitates their financing and thus effectively increases resilience.Second,digital inclusive finance has an improving impact on the resilience of both state-owned and non-state-owned SMEs,and the impact of digital inclusive finance is stronger for non-state-owned SMEs.From the above conclusions,it is clear that China needs to further promote the development of digital inclusive finance and continuously improve the resilience of SMEs.On this basis,the following recommendations are made: firstly,to improve the direct financing environment for SMEs,expand the listing and financing channels for quality SMEs,realize the government’s leading role in SME development in the market economy,promote the participation of quality SMEs in direct financing,and increase the proportion of direct financing.Second,to improve the quality of the supply of indirect finance to SMEs and ensure a central role for financial institutions in the SME financing process.Thirdly,innovate financial service models,continuously promote the creation of digital inclusive financial pioneer zones,encourage early and pilot deployment and innovate products and services that facilitate SMEs’ financing needs.Fourth,strengthen the establishment of a financial support system and improve the stock of financial knowledge and financing capacity of SMEs.