A study of the impact of digital inclusive finance on firm value from the perspective of financing constraints

ABSTRACT

The existing research on the impact of digital inclusive finance on corporate behaviour is relatively extensive, but the research on the impact of digital inclusive finance on corporate value is ignored. To fill in this gap, this study examines the impact of digital inclusive finance on firm value from the perspective of financing constraints, utilizing data on A-share listed companies in China from 2012 to 2019. We found that digital inclusive finance helps increase corporate value. And digital inclusive finance uses digital technology to alleviate financing constraints and improve the credit supply, which in turn increases firm value. Moreover, the impact of digital inclusive finance on firm value demonstrates heterogeneity. Compared with other firms, digital inclusive finance has a greater value-enhancing effect on small-scale and private firms. Our findings suggest that increasing the level of digital inclusive finance in developing countries can help enhance firm value.

KEYWORDS:

• Digital inclusive finance
• firm value
• financing constraints
• financial regulation

JEL CLASSIFICATION:

• G32
• L10

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

¹ Eliminating ST, PT, financial firms, samples with missing data for the major variables and fewer than 10 employees; performing a 1% tailing process for continuous variables.

Additional information

Funding

The work was supported by the National Natural Science Foundation of China [72201114, 72262015, 72063010, 72263013]; Humanities and Social Sciences Youth Program of the Ministry of Education [22YJC790148]; Social Science Foundation of Jiangxi Province Project [22Y36]; Innovative projects for postgraduate students in Jiangxi Province [YC2022-s471].