IDEAS home Printed from https://ideas.repec.org/a/spt/apfiba/v13y2023i4f13_4_5.html

Can Digital Inclusive Finance better serve the development of the real economy?

Author

Listed:
  • Saisai Zhang
  • Jianbin Wei

Abstract

For a long time, the development of financial services for the real economy has faced many dilemmas. However, can the digitalization of finance based on the new generation of information and communication technology solve this dilemma? By combining the CGSS2017 data, the digital financial inclusion data (2011-2018) of Peking University and the 2017 provincial statistical yearbooks, we choose to reflect the development of financial digitization by "whether or not to use WeChat payment/Alipay", and conduct an empirical analysis of the overall and heterogeneity of the impact of financial digitization on entrepreneurial activities. The study finds: (1) digital finance can promote entrepreneurial choice and performance in general, but the differential impact on both shows opposite trends; (2) by testing the mechanism, we find that digital finance eases the information constraint faced by entrepreneurs and improves the regional market environment, but leads to a slight decrease in the maximum loan amount received by entrepreneurs. Further analysis of variance across contexts finds: (1) the marginal effects of digital finance on entrepreneurial choice and entrepreneurial performance are higher in both better institutional contexts than in worse institutional contexts; (2) in both cultural and economic contexts, the facilitation effect of digital finance on entrepreneurial choice is significantly higher in better contexts than in worse contexts, but the opposite effect of digital finance on entrepreneurial performance is found, i.e., the marginal effect is higher in the poorer context than in the better context. The study reveals the complexity and multidimensionality of the impact of digital finance on entrepreneurial activity, and the heterogeneity of entrepreneurial choice and performance, reflecting that digital finance is a "double-edged sword" that can create a "digital divide" while promoting entrepreneurial activity the problem. The analysis of different contexts suggests that building the institutional environment, creating a cultural climate and ensuring macroeconomic stability are key to digital finance for entrepreneurial activities. JEL classification numbers: C36, G10, F35, F37.

Suggested Citation

  • Saisai Zhang & Jianbin Wei, 2023. "Can Digital Inclusive Finance better serve the development of the real economy?," Journal of Applied Finance & Banking, SCIENPRESS Ltd, vol. 13(4), pages 1-5.
    • Handle: RePEc:spt:apfiba:v:13:y:2023:i:4:f:13_4_5
    as

    Download full text from publisher

    File URL: http://www.scienpress.com/Upload/JAFB%2fVol%2013_4_5.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Banerjee, Abhijit V & Newman, Andrew F, 1993. "Occupational Choice and the Process of Development," Journal of Political Economy, University of Chicago Press, vol. 101(2), pages 274-298, April.
    2. Prieger, James E. & Bampoky, Catherine & Blanco, Luisa R. & Liu, Aolong, 2016. "Economic Growth and the Optimal Level of Entrepreneurship," World Development, Elsevier, vol. 82(C), pages 95-109.
    3. Edward L. Glaeser & Sari Pekkala Kerr & William R. Kerr, 2015. "Entrepreneurship and Urban Growth: An Empirical Assessment with Historical Mines," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 498-520, May.
    4. Suresh de Mel & David McKenzie & Christopher Woodruff, 2009. "Returns to Capital in Microenterprises: Evidence from a Field Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(1), pages 423-423.
    5. Donald F. Kuratko & David B. Audretsch, 2009. "Strategic Entrepreneurship: Exploring Different Perspectives of an Emerging Concept," Entrepreneurship Theory and Practice, , vol. 33(1), pages 1-17, January.
    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. Yanzhao Zhang & Jianbin Wei, 2023. "Digital Financial Development, Diversification of Financial Services Participation and Entrepreneurial Choices for Residents," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 13(4), pages 1-4.
    2. Shurui Wang & Dongchen Ma & Yan Yang, 2024. "Digital Financial Development, Financial Service Participation and Residents' Entrepreneurship," Advances in Management and Applied Economics, SCIENPRESS Ltd, vol. 14(6), pages 1-5.
    3. Catherine Wolfram & Orie Shelef & Paul Gertler, 2012. "How Will Energy Demand Develop in the Developing World?," Journal of Economic Perspectives, American Economic Association, vol. 26(1), pages 119-138, Winter.
    4. Marshall Burke & Lauren Falcao Bergquist & Edward Miguel, 2019. "Sell Low and Buy High: Arbitrage and Local Price Effects in Kenyan Markets," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 134(2), pages 785-842.
    5. Ahlin, Christian & Gulesci, Selim & Madestam, Andreas & Stryjan, Miri, 2020. "Loan contract structure and adverse selection: Survey evidence from Uganda," Journal of Economic Behavior & Organization, Elsevier, vol. 172(C), pages 180-195.
    6. Paul J. Gertler & Orie Shelef & Catherine D. Wolfram & Alan Fuchs, 2016. "The Demand for Energy-Using Assets among the World's Rising Middle Classes," American Economic Review, American Economic Association, vol. 106(6), pages 1366-1401, June.
    7. Li, Lixing & Wu, Xiaoyu, 2014. "Housing price and entrepreneurship in China," Journal of Comparative Economics, Elsevier, vol. 42(2), pages 436-449.
    8. Ayyagari, Meghana & Beck, Thorsten & Hoseini, Mohammad, 2020. "Finance, law and poverty: Evidence from India," Journal of Corporate Finance, Elsevier, vol. 60(C).
    9. Gharad Bryan & Dean Karlan & Jonathan Zinman, 2015. "Referrals: Peer Screening and Enforcement in a Consumer Credit Field Experiment," American Economic Journal: Microeconomics, American Economic Association, vol. 7(3), pages 174-204, August.
    10. Logan (Geng) Li & Zhengwei Wang, 2022. "Understanding the long‐term effects of Keju: The case of entrepreneurship in China," Economics of Transition and Institutional Change, John Wiley & Sons, vol. 30(4), pages 665-689, October.
    11. Rafael P. Ribas, 2014. "Liquidity Constraints, Informal Financing, and Entrepreneurship: Direct and Indirect Effects of a Cash Transfer Programme," Working Papers 131, International Policy Centre.
    12. Gharad Bryan & Dean Karlan & Jonathan Zinman, 2012. "You Can Pick Your Friends, But You Need to Watch Them: Loan Screening and Enforcement in a Referrals Field Experiment," Working Papers 1009, Economic Growth Center, Yale University.
    13. Kazushi Takahashi & Abu Shonchoy & Seiro Ito & Takashi Kurosaki, 2017. "How Does Contract Design Affect the Uptake of Microcredit among the Ultra-poor? Experimental Evidence from the River Islands of Northern Bangladesh," Journal of Development Studies, Taylor & Francis Journals, vol. 53(4), pages 530-547, April.
    14. Abhijit Banerjee & Sendhil Mullainathan, 2010. "The Shape of Temptation: Implications for the Economic Lives of the Poor," NBER Working Papers 15973, National Bureau of Economic Research, Inc.
    15. Francisco J. Buera & Joseph P. Kaboski & Yongseok Shin, 2020. "Taking Stock of the Evidence on Microfinancial Interventions," Review, Federal Reserve Bank of St. Louis, vol. 102(2), pages 173-202, May.
    16. Oriana Bandiera & Robin Burgess & Erika Deserranno & Ricardo Morel & Imran Rasul & Munshi Sulaiman & Jack Thiemel, 2022. "Microfinance and Diversification," Economica, London School of Economics and Political Science, vol. 89(S1), pages 239-275, June.
    17. Chikako Yamauchi, 2008. "Heterogeneity in the Returns to Investment in Poor Villages," CEPR Discussion Papers 582, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    18. Kim, Dong-Hyeon & Liu, Peiyao & Lin, Shu-Chin, 2025. "Nonlinearity in the nexus between financial development and wealth inequality," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 99(C).
    19. Ding, Haoyuan & Dong, Wenjuan & Qin, Cong, 2025. "Does migrant working experience stimulate returnees’ entrepreneurship: Evidence from rural China," Journal of Economic Behavior & Organization, Elsevier, vol. 229(C).
    20. Demirguc-Kunt, Asli & Levine, Ross, 2008. "Finance and economic opportunity," Policy Research Working Paper Series 4468, The World Bank.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • C36 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Instrumental Variables (IV) Estimation
    • G10 - Financial Economics - - General Financial Markets - - - General (includes Measurement and Data)
    • F35 - International Economics - - International Finance - - - Foreign Aid
    • F37 - International Economics - - International Finance - - - International Finance Forecasting and Simulation: Models and Applications

    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:spt:apfiba:v:13:y:2023:i:4:f:13_4_5. 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: Eleftherios Spyromitros-Xioufis (email available below). General contact details of provider: http://www.scienpress.com/ .

    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.