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How does the development of digital financial inclusion affect the total factor productivity of listed companies? Evidence from China

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  • Chen, Yang
  • Yang, Shengping
  • Li, Quan

Abstract

Since 2010, the Chinese government has focused on supporting the development of financial inclusion through various policies. New technological advances have led to the vigorous development of digital financial inclusion, which has a broad impact on market participants. We examine how digital financial inclusion affects the total factor productivity of listed companies in China. Using data on listed companies and the Digital Financial Inclusion Index from 2011 to 2020, our empirical results show that the development of digital financial inclusion has no positive impact on the total factor productivity of listed companies. Although previous studies have shown that digital financial inclusion can solve the financing constraints of small and micro enterprises, our results prove that it cannot play a similar role in the sample of listed companies. We find this negative effect to be significant for state-owned enterprises, but not for a separate sample of non-state-owned enterprises. However, in large cities with concentrated financial resources, digital financial inclusion can greatly improve the productivity of listed companies, which indicates that the development of digital finance requires the solid foundation of traditional financial systems to be fully effective.

Suggested Citation

  • Chen, Yang & Yang, Shengping & Li, Quan, 2022. "How does the development of digital financial inclusion affect the total factor productivity of listed companies? Evidence from China," Finance Research Letters, Elsevier, vol. 47(PB).
    • Handle: RePEc:eee:finlet:v:47:y:2022:i:pb:s1544612322002100
    DOI: 10.1016/j.frl.2022.102956
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    Cited by:

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    2. Ya Wu & Yin Liu & Minglong Zhang, 2023. "How Does Digital Finance Affect Energy Efficiency?—Characteristics, Mechanisms, and Spatial Effects," Sustainability, MDPI, vol. 15(9), pages 1-24, April.
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    4. Li, Guoxiang & Wu, Haoyue & Jiang, Jieshu & Zong, Qingqing, 2023. "Digital finance and the low-carbon energy transition (LCET) from the perspective of capital-biased technical progress," Energy Economics, Elsevier, vol. 120(C).
    5. Hua Zhang & Qiwang Zhang, 2023. "How Does Digital Transformation Facilitate Enterprise Total Factor Productivity? The Multiple Mediators of Supplier Concentration and Customer Concentration," Sustainability, MDPI, vol. 15(3), pages 1-18, January.
    6. Zhang, Pei & Hao, Dongyang, 2023. "Enterprise financial management and fossil fuel energy efficiency for green economic growth," Resources Policy, Elsevier, vol. 84(C).
    7. Wang Jian & Wenjuan Huang & Woraphon Yamaka & Jianxu Liu, 2023. "Internet Development and Green Total Factor Productivity: New Evidence of Mediation and Threshold Effects," Sustainability, MDPI, vol. 15(16), pages 1-23, August.
    8. Kaifeng Li & Yun Chen & Jingren Chen, 2023. "How to Improve Industrial Green Total Factor Productivity under Dual Carbon Goals? Evidence from China," Sustainability, MDPI, vol. 15(11), pages 1-13, June.
    9. Donghong Wu & Yiren Chen, 2023. "Digital Inclusive Finance Development and Labor Productivity: Based on a Capital-Deepening Perspective," Sustainability, MDPI, vol. 15(12), pages 1-17, June.
    10. Sun, Yanan & You, Xiaotong, 2023. "Do digital inclusive finance, innovation, and entrepreneurship activities stimulate vitality of the urban economy? Empirical evidence from the Yangtze River Delta, China," Technology in Society, Elsevier, vol. 72(C).

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