Home country digital finance development and post-entry internationalization speed of emerging market SMEs: Empirical evidence from China

Chao Zhou and Jinglin Liao

International Review of Financial Analysis, 2024, vol. 91, issue C

Abstract: Digital finance development (DFD) has profoundly impacted various aspects of our society. This study investigates how home country DFD affects the post-entry internationalization speed (PIS) of small and medium-sized enterprises (SMEs) in emerging markets. Using data on Chinese manufacturing SMEs from 2011 to 2020, we find that home country DFD exerts a significantly positive impact on emerging market SMEs' PIS. In particular, this positive impact is especially pronounced for SMEs led by CEOs with overseas experience, those in high-tech industries, and those in home country regions with a high level of traditional finance development. The mechanism analysis demonstrates that home country DFD enhances SMEs' PIS through two channels: easing firm financing constraints and improving firm productivity. Our findings advance the knowledge about the economic effects of DFD and the determinants of PIS.

Keywords: Digital finance; Post-entry internationalization speed; Financing constraint; Firm productivity; SME (search for similar items in EconPapers)
JEL-codes: F23 G20 G30 O33 (search for similar items in EconPapers)
Date: 2024
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Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:91:y:2024:i:c:s105752192300532x

DOI: 10.1016/j.irfa.2023.103016

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