Inclusive Digital Finance, External Financing, and High-Tech Enterprise Innovation Performance

This study investigates the relationship between digital financial inclusion, external financing, and the innovation performance of high-tech enterprises in China. The present analysis utilizes the panel data from 2011 to 2018 of 114 companies in the Yangtze River Delta region and the "The Peking University Digital Financial Inclusion Index of China” (PKU-DFIIC) released by the Peking University Digital Finance Research Center and Ant Financial Group. The results show that the Digital Financial Inclusion Index (DFIIC) has a significant positive correlation with the innovation performance of high-tech enterprises.The higher the level of debt financing, the stronger the role of digital financial inclusion in promoting innovation performance. Investigating the DFIIC in terms ofcoverage breadth and usage depth, we find that usage depth does not significantly encourage innovation performance. The effect of the interaction between coverage breadth and external financing is consistent with the results for the DFIIC.The study suggest that equity financing promotes the usage depth of the DFIIC in state-owned enterprises. In contrast, debt financing promotes the coverage breadth of non-state-owned enterprises. Finally, we propose relevant policy recommendations based on the research results. It includes in-depth popularization of inclusive finance in the daily operations of enterprises at the technical level, refinement of external financing policy incentives for enterprises based on the characteristics of ownership, and strengthening of the research of technologies such as big data, Al, and cloud computing.