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Digital economy and SME financing costs: Evidence from China

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  • Zhou, Han
  • Cheng, Yushan
  • Chen, Xiaofeng
  • Li, Gengchen

Abstract

With the rapid development of the digital economy, whether the digital economy can reshape SME financing costs has become a key question for academic research. This study selects the comprehensive development index of the digital economy from 30 provinces in China and data on A-share listed enterprises for the period 2012–2023 to construct a panel data model. This model is employed to investigate the impact of the digital economy on SME financing costs and its underlying mechanisms. The findings reveal that the digital economy can significantly reduce SME financing costs. Mechanism tests indicate that the digital economy reduces SME financing costs by enhancing corporate information transparency. Furthermore, the cost-reducing effect of the digital economy is more pronounced for SMEs in technology-intensive industries.

Suggested Citation

  • Zhou, Han & Cheng, Yushan & Chen, Xiaofeng & Li, Gengchen, 2025. "Digital economy and SME financing costs: Evidence from China," Finance Research Letters, Elsevier, vol. 86(PB).
    • Handle: RePEc:eee:finlet:v:86:y:2025:i:pb:s1544612325017027
    DOI: 10.1016/j.frl.2025.108448
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    References listed on IDEAS

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