The Impact of Digital Inclusive Finance on the Growth Path of Chinese Private Enterprises: From the Perspective of Financing Constraints

Abstract

Digital inclusive finance, as an innovative financial service model, is gradually becoming an important means to alleviate financing constraints for private enterprises and promote the sustainable and healthy development of the private economy. To better leverage the role of digital inclusive finance, further research is needed to understand the mechanisms through which it promotes private economic development. This paper first explains the theoretical mechanisms by which digital inclusive finance affects the development of the private economy, focusing primarily on the perspective of financing constraints. Using panel data from 1,329 private enterprises in China from 2016 to 2022, a fixed effects model is employed to empirically analyze the impact mechanisms of digital inclusive finance on the development of the private economy nationwide. The main conclusions are as follows: From 2016 to 2022, both the digital inclusive finance index and the level of private economic development in China showed an upward trend, but significant differences exist between different cities. Through fixed effects analysis, this paper finds that digital inclusive finance promotes the development of the private economy nationwide by alleviating financing constraints.