Technological progress, financial constrains, and digital financial inclusion

Ding Hu (), Xianming Fang () and Yuting Meng DiGiovanni ()
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Ding Hu: Nanjing University
Xianming Fang: Nanjing University
Yuting Meng DiGiovanni: University of South Florida

Small Business Economics, 2023, vol. 61, issue 4, No 13, 1693-1721

Abstract: 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.

Keywords: Small and medium-sized enterprises (SMEs); Technological progress; Financing gap; Digital financial inclusion (search for similar items in EconPapers)
JEL-codes: G32 L26 O16 O31 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s11187-023-00745-7

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