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Technological progress, financial constrains, and digital financial inclusion

Author

Listed:
  • Ding Hu

    (Nanjing University)

  • Xianming Fang

    (Nanjing University)

  • Yuting Meng DiGiovanni

    (University of South Florida)

Abstract

This paper explores the relationship between technological progress and the financial constraints faced by small and medium-sized enterprises (SMEs), as well as the role of digital financial inclusion in alleviating these constraints. Our study utilizes a unique dataset of SMEs in a coastal province of China to arrive at the conclusion that technological progress is positively associated with SMEs’ financing gap. This relationship is stronger for SMEs that depend on indirect debt financing. Moreover, digital financial inclusion, especially the depth of digital financial inclusion and digitalization level of financial service, can mitigate the adverse effects of technological progress on SMEs’ financial constraints. The coverage of digital financial inclusion, on the other hand, has no discernible impact.

Suggested Citation

  • Ding Hu & Xianming Fang & Yuting Meng DiGiovanni, 2023. "Technological progress, financial constrains, and digital financial inclusion," Small Business Economics, Springer, vol. 61(4), pages 1693-1721, December.
    • Handle: RePEc:kap:sbusec:v:61:y:2023:i:4:d:10.1007_s11187-023-00745-7
    DOI: 10.1007/s11187-023-00745-7
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    More about this item

    Keywords

    Small and medium-sized enterprises (SMEs); Technological progress; Financing gap; Digital financial inclusion;
    All these keywords.

    JEL classification:

    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • L26 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Entrepreneurship

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