Digital Finance and Entrepreneurial Return Rate: Effects, Mechanisms and Inequality

Shijun Chai, Li Zhou*, Yang Chen

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

This study matches the digital financial inclusion index with micro panel data from the China Household Finance Survey (CHFS) in 2015, 2017, and 2019, and explores the impact of digital finance on the return rate of entrepreneurship. The results show that the effect is positive—entrepreneurial households in prefectures with higher digital finance obtain higher return rates—and remarkably reliable to a battery of endogeneity and robustness tests. Mechanism analysis indicates that the positive effect of digital finance on the return rate of entrepreneurship is achieved mainly through facilitating external financing and reducing financial transaction costs. Further research finds that the spillover effect of digital finance has obvious Internet bias: the “digital dividend” only extends to the advantaged classes who have access to the Internet—non-rural and migrating rural entrepreneurs, but for non-migrating rural entrepreneurs generally facing digital exclusion, digital finance has little effect on their return rate. The empirical evidence presented in this study has important policy implications for accelerating the digital finance process, promoting high-quality entrepreneurship development, and boosting digital poverty groups to break stratum solidification.

Original languageEnglish
JournalSAGE Open
Volume13
Issue number4
DOIs
Publication statusPublished - 1 Oct 2023

Keywords

  • credit support
  • digital finance
  • entrepreneurial return rate
  • financial transaction costs
  • information transmission

Fingerprint

Dive into the research topics of 'Digital Finance and Entrepreneurial Return Rate: Effects, Mechanisms and Inequality'. Together they form a unique fingerprint.

Cite this