IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v86y2025ipbs1544612325016460.html

Mechanisms of digital finance on collaborative innovation of small and medium-sized enterprise clusters

Author

Listed:
  • Zhao, Boyu
  • Yu, Conglei
  • Zhao, Feng
  • Wang, Lingli

Abstract

Extant studies have generally documented that digital finance can substantially influence innovation performance. In this research, we explore possible economic mechanisms through which digital finance exerts its influence. Based on a holistic sample of small and medium-sized enterprise clusters in China over the period of 2015 to 2024, this paper confirms that digital finance enhances the collaborative innovation performance of SME clusters. We identify three plausible mechanisms: reduced financing costs, enhanced capital efficiency, and improved trade credit. We further found that enhanced collaborative innovation leads to higher profits. Overall, this paper complements to research on digital finance and innovation.

Suggested Citation

  • Zhao, Boyu & Yu, Conglei & Zhao, Feng & Wang, Lingli, 2025. "Mechanisms of digital finance on collaborative innovation of small and medium-sized enterprise clusters," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325016460
    DOI: 10.1016/j.frl.2025.108392
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612325016460
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2025.108392?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Caiyun Chen & Minghuan Li, 2023. "Does digital finance impact debt concentration of Chinese firms?," Applied Economics Letters, Taylor & Francis Journals, vol. 30(7), pages 871-874, April.
    2. Tao Kong & RenJi Sun & Guanglin Sun & Youtao Song, 2022. "Effects of Digital Finance on Green Innovation considering Information Asymmetry: An Empirical Study Based on Chinese Listed Firms," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 58(15), pages 4399-4411, December.
    3. Mu, Weiwei & Liu, Kefu & Tao, Yunqing & Ye, Yongwei, 2023. "Digital finance and corporate ESG," Finance Research Letters, Elsevier, vol. 51(C).
    4. Ekaterina Turkina & Boris Oreshkin & Raja Kali, 2019. "Regional innovation clusters and firm innovation performance: an interactionist approach," Regional Studies, Taylor & Francis Journals, vol. 53(8), pages 1193-1206, August.
    5. Li, Chengming & Wang, Yilin & Zhou, Zhihan & Wang, Zeyu & Mardani, Abbas, 2023. "Digital finance and enterprise financing constraints: Structural characteristics and mechanism identification," Journal of Business Research, Elsevier, vol. 165(C).
    6. Sun, Xiaoyan & Xie, Xuanli, 2024. "How does digital finance promote entrepreneurship? The roles of traditional financial institutions and BigTech firms," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    7. Chen, Shengqi & Zhang, Hong, 2021. "Does digital finance promote manufacturing servitization: Micro evidence from China," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 856-869.
    8. Li, Jie & Wu, Yu & Xiao, Jing Jian, 2020. "The impact of digital finance on household consumption: Evidence from China," Economic Modelling, Elsevier, vol. 86(C), pages 317-326.
    9. Xuan Tian & Jiajie Xu, 2022. "Do Place-Based Policies Promote Local Innovation and Entrepreneurship? [A model of growth through creative destruction]," Review of Finance, European Finance Association, vol. 26(3), pages 595-635.
    10. Geoffrey G. Bell, 2005. "Clusters, networks, and firm innovativeness," Strategic Management Journal, Wiley Blackwell, vol. 26(3), pages 287-295, March.
    11. Gao, Jingyi & Ren, Yuanming & Zhan, Xinyu, 2025. "Does digital finance alter the leverage decision of firms? Evidence from China," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    12. Jin, Laiqun & Dai, Jiaying & Jiang, Weijie & Cao, Kairui, 2023. "Digital finance and misallocation of resources among firms: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 66(C).
    13. Jiang, Kangqi & Du, Xinyi & Chen, Zhongfei, 2022. "Firms' digitalization and stock price crash risk," International Review of Financial Analysis, Elsevier, vol. 82(C).
    14. Ren, Yuanming & Gao, Jingyi, 2023. "Does the development of digital finance promote firm exports? Evidence from Chinese enterprises," Finance Research Letters, Elsevier, vol. 53(C).
    15. Zhang, Li & Chen, Xikai & Peng, Jiao & Guo, Tongtong, 2025. "Can digital inclusive finance promote the Internet business model? Empirical evidence from Chinese listed firms," International Review of Financial Analysis, Elsevier, vol. 102(C).
    16. Li, Xin & Shao, Xuefeng & Chang, Tsangyao & Albu, Lucian Liviu, 2022. "Does digital finance promote the green innovation of China's listed companies?," Energy Economics, Elsevier, vol. 114(C).
    17. Yuanbin Xu & Yuchen Wang & Fucai Lu & Dan Sheng, 2024. "A study of the impact of digital inclusive finance on firm value from the perspective of financing constraints," Applied Economics, Taylor & Francis Journals, vol. 56(33), pages 4033-4047, July.
    18. Wu, Yilin & Huang, Shilei, 2022. "The effects of digital finance and financial constraint on financial performance: Firm-level evidence from China's new energy enterprises," Energy Economics, Elsevier, vol. 112(C).
    19. Wang, Wenwen, 2025. "Digital finance and firm green innovation: The role of media and executives," Finance Research Letters, Elsevier, vol. 74(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Li, Shuang & Xie, Nan, 2025. "The impact of digital finance on firms' digital Transformation: Mechanism analysis based on enterprise financing," International Review of Economics & Finance, Elsevier, vol. 101(C).
    2. Hongyi Wang & Yi Li & Bingyang He, 2024. "Spatial Spillover Effects of Digital Finance on Corporate ESG Performance," Sustainability, MDPI, vol. 16(16), pages 1-20, August.
    3. Khalid, Fahad & Irfan, Muhammad & Srivastava, Mohit, 2024. "The impact of digital inclusive finance on ESG disputes: Evidence from Chinese non-financial listed companies," Technological Forecasting and Social Change, Elsevier, vol. 204(C).
    4. Zheng, Minyu, 2025. "Digital finance, e-commerce development, and regional trade development," Finance Research Letters, Elsevier, vol. 81(C).
    5. Zheng, Minyu, 2025. "Digital finance, financing constraints, and regional trade development," Finance Research Letters, Elsevier, vol. 85(PC).
    6. Zhang, Ping & Wang, Yiru, 2025. "Digital finance and stock price crash: Evidence from China," Emerging Markets Review, Elsevier, vol. 66(C).
    7. Ayaz, Muhammad & Anwer, Zaheer & Hassan, M. Kabir & Xiaoyang, Xu, 2025. "Inhabiting influence of digital finance on stock price synchronicity," Global Finance Journal, Elsevier, vol. 64(C).
    8. Yue, Sishi & Yang, Mo & Dong, Dayong, 2024. "Do enterprises adopting digital finance exhibit higher values? Based on textual analysis," The North American Journal of Economics and Finance, Elsevier, vol. 73(C).
    9. Wu, Ke & Zhang, Yongfang & Chen, Ying & Li, Miao, 2025. "Impact of digital finance on corporate ESG," International Review of Financial Analysis, Elsevier, vol. 104(PA).
    10. Kang, Weijing, 2025. "Impact and mechanisms of digital finance on corporate bond credit spreads in China," Finance Research Letters, Elsevier, vol. 82(C).
    11. Ding, Qian & Huang, Jianbai & Chen, Jinyu, 2023. "Does digital finance matter for corporate green investment? Evidence from heavily polluting industries in China," Energy Economics, Elsevier, vol. 117(C).
    12. Yang, Rui & Li, Rongrong & Ge, Xinyu, 2025. "Digital finance development, financial mismatches, and corporate shadow banking activities," China Economic Review, Elsevier, vol. 93(C).
    13. Tang, Ye & Geng, Baiyang, 2024. "Digital finance development level and corporate debt financing cost," Finance Research Letters, Elsevier, vol. 60(C).
    14. Wang, Wenwen, 2025. "Digital finance and firm green innovation: The role of media and executives," Finance Research Letters, Elsevier, vol. 74(C).
    15. Chen, Junshi & Chi, Jing & Smith, David & Yuen, Mui Kuen, 2025. "How does digital finance impact birth rates: Evidence from China," Economic Analysis and Policy, Elsevier, vol. 86(C), pages 1945-1965.
    16. Rui Ding & Siwei Shen & Yuqi Zhu & Linyu Du & Shihui Chen & Juan Liang & Kexing Wang & Wenqian Xiao & Yuxuan Hong, 2023. "Evolution, Forecasting, and Driving Mechanisms of the Digital Financial Network: Evidence from China," Sustainability, MDPI, vol. 15(22), pages 1-18, November.
    17. Zhan, Zhihao & Zhang, Anqi & Zhang, Mingxin & Zhang, Mingxin, 2024. "Unveiling the adverse selection problem in China's digital lending market: Evidence from CHFS," International Review of Financial Analysis, Elsevier, vol. 96(PA).
    18. Wang, Mansi & Yu, Xinxin & Hong, Xinyi & Yang, Xiaotao, 2025. "Can digital finance promote green innovation collaboration in enterprises?," Global Finance Journal, Elsevier, vol. 65(C).
    19. Li, Guo & Xue, Jing & Li, Na & Qi, Qingwu, 2024. "Does digital finance favor firms in supply chains? Roles of green innovation and bargaining power," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 183(C).
    20. Qiong Zhang & Zhihong Mao, 2025. "Digital Finance, Financing Constraints, and Green Innovation in Chinese Firms: The Roles of Management Power and CSR," Sustainability, MDPI, vol. 17(15), pages 1-39, August.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325016460. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.