Research on the Impact of Digital Inclusive Finance on Corporate Financing Cost: Theoretical Mechanism and Empirical Test (Advances in Economics Management and Political Sciences)

Summary

• Analysis of A-share non-financial listed companies from 2011 to 2023 demonstrates that higher city-level digital inclusive finance development significantly lowers corporate financing costs.p.1
• The baseline econometric model yields a statistically significant negative coefficient of -0.1757 for the city-level digital inclusive finance index on corporate financing cost.p.12
• Heterogeneity analysis reveals that digital inclusive finance significantly reduces financing costs for non-state-owned enterprises with a coefficient of -0.2031, while the effect for state-owned enterprises is not statistically significant.p.14
• Regionally, the financing cost reduction effect is stronger in the eastern region with a coefficient of -0.2945, compared to -0.2023 in the central, western, and northeast regions.p.15
• By enterprise scale, larger-scale firms experience a greater cost-reduction impact (-0.2066) than smaller-scale firms (-0.1202).p.15

Key insights

1. Digital inclusive finance lowers corporate financing costs primarily by enriching the external information environment and reducing information asymmetry.p.1
2. Alternative operational data such as payment flows and tax records allow external market actors to verify operating performance and lower screening costs.p.6
3. Non-state-owned enterprises benefit more from digital inclusive finance because alternative data acts as a vital credit signal supplementing limited traditional collateral.p.14
4. Larger firms derive stronger financing cost reductions from regional digital financial growth because their structured financial disclosures allow credit models to incorporate digital data more efficiently.p.15
5. The impact of digital finance is more pronounced in the eastern region where mature financial markets and advanced digital infrastructure create strong synergies.p.15
6. Robustness tests replacing financing costs relative to total assets with liabilities yields a similar negative coefficient of -0.1787.p.16
7. Excluding shock periods such as 2020–2021 (-0.1955), 2018 (-0.1815), and 2019 (-0.1687) confirms the stability of the baseline relationship.p.16