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Digital financial capability and entrepreneurial performance

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  • Luo, Yu
  • Peng, Yuchao
  • Zeng, Lianyun

Abstract

Utilizing the 2017 China Household Finance Survey (CHFS) data, this paper is among the first to define and measure digital financial capability (DFC), showing that it has significant and positive influence on business ownership, business innovation and financial performance. The results still hold after addressing endogeneity. Furthermore, we illustrate how DFC impacts entrepreneurial performance through sale, borrowing and investment channels. In addition, heterogeneity examinations show that improvement of DFC can benefit vulnerable populations more, especially those in rural or less-developed areas. This study calls attention to recognizing the importance of DFC for micro businesses in the digital era, and provides implications concerning both employment and economic inclusion policies for countries which might go through similar stages.

Suggested Citation

  • Luo, Yu & Peng, Yuchao & Zeng, Lianyun, 2021. "Digital financial capability and entrepreneurial performance," International Review of Economics & Finance, Elsevier, vol. 76(C), pages 55-74.
    • Handle: RePEc:eee:reveco:v:76:y:2021:i:c:p:55-74
    DOI: 10.1016/j.iref.2021.05.010
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    1. Jie Dong, 2023. "Study on the Identification of Financial Risk Path Under the Digital Transformation of Enterprise Based on DEMATEL-ISM-MICMAC," Papers 2305.04216, arXiv.org.
    2. García-Suaza, A & Rodríguez-González, D & Sarango, A & Mayorga, J. D & Pretel, A & Husain-Talero, S & Zarama, L & Urbano, J. C., Girón, D., Medina, N, 2022. "Los impactos de la inclusión financiera en los micronegocios: factores que explican aumentos en los ingresos y crecimiento de los negocios," Documentos de Trabajo 20418, Universidad del Rosario.
    3. Kai Zhao & Jiaqi Yang & Wanshu Wu, 2023. "Impacts of Digital Economy on Urban Entrepreneurial Competencies: A Spatial and Nonlinear Perspective," Sustainability, MDPI, vol. 15(10), pages 1-16, May.
    4. Shao, KaiChao & Ma, Ruixue & Kamber, Joseph, 2023. "An in-depth analysis of the entrepreneurship of rural Chinese mothers and the digital inclusive finance," Telecommunications Policy, Elsevier, vol. 47(7).
    5. Azra Zaimovic & Anes Torlakovic & Almira Arnaut-Berilo & Tarik Zaimovic & Lejla Dedovic & Minela Nuhic Meskovic, 2023. "Mapping Financial Literacy: A Systematic Literature Review of Determinants and Recent Trends," Sustainability, MDPI, vol. 15(12), pages 1-30, June.
    6. Maryna Brychko & Yuriy Bilan & Serhiy Lyeonov & Dalia Streimikiene, 2023. "Do changes in the business environment and sustainable development really matter for enhancing enterprise development?," Sustainable Development, John Wiley & Sons, Ltd., vol. 31(2), pages 587-599, April.
    7. Lee, Chien-Chiang & Lou, Runchi & Wang, Fuhao, 2023. "Digital financial inclusion and poverty alleviation: Evidence from the sustainable development of China," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 418-434.
    8. Yan, Bin & Wang, Feng & Chen, Tian & Liu, Siyu & Bai, Xiaoxuan, 2023. "Digital finance, environmental regulation and emission reduction in manufacturing industry: New evidence incorporating dynamic spatial-temporal correlation and competition," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 750-763.
    9. Lee, Chien-Chiang & Tang, Manting & Lee, Chi-Chuan, 2023. "Reaping digital dividends: Digital inclusive finance and high-quality development of enterprises in China," Telecommunications Policy, Elsevier, vol. 47(2).
    10. Jiayi Li & Shujun Ye & Shujuan Wang, 2023. "Spatial Network Analysis on the Coupling Coordination of Digital Finance and Technological Innovation," Sustainability, MDPI, vol. 15(8), pages 1-22, April.
    11. Tan, Ying & Li, Xiaoying, 2022. "The impact of internet on entrepreneurship," International Review of Economics & Finance, Elsevier, vol. 77(C), pages 135-142.
    12. Cheng, Yiran & Zhou, Xiaorui & Li, Yongjian, 2023. "The effect of digital transformation on real economy enterprises’ total factor productivity," International Review of Economics & Finance, Elsevier, vol. 85(C), pages 488-501.

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    More about this item

    Keywords

    Digital financial capability; Entrepreneurial performance; Business ownership; Business innovation; Financial performance;
    All these keywords.

    JEL classification:

    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship
    • L96 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Telecommunications
    • G53 - Financial Economics - - Household Finance - - - Financial Literacy

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