Digital Inclusive Financial Development, Financing Constraints and Shadow Banking by Non-Financial Firms

Jinsha Jiang

doi:10.54097/f7dpnt53

Authors

Jinsha Jiang

DOI:

https://doi.org/10.54097/f7dpnt53

Keywords:

Digital Financial Inclusion, Shadow Banking, Regional Banking Competition

Abstract

Shadow banking by non-financial enterprises is outside the banking regulatory system, and its scale is expanding, posing a threat to China's financial stability and security. The development of digital inclusive finance can help restrain its blind expansion, and this restraint is mainly reflected in two effects: firstly, the ‘technological’ and ‘inclusive’ nature of digital inclusive finance has a direct restraint effect on the shadow banking business of non-financial enterprises; secondly, the digital inclusive finance has a direct restraint effect on the shadow banking business of non-financial enterprises; secondly, the digital inclusive finance has a direct restraint effect on the shadow banking business of non-financial enterprises. First, the ‘technological’ and ‘inclusive’ nature of digital inclusive finance has a direct inhibitory effect on shadow banking of non-financial enterprises; second, the development of digital inclusive finance has an indirect inhibitory effect by reducing the financing constraints of SMEs, thereby reducing the demand for shadow banking of SMEs in the region. Further heterogeneity analysis shows that the inhibitory effect of digital inclusive finance on shadow banking is more pronounced in enterprises with a low degree of digital transformation, suggesting that digital inclusive finance enhances the information transparency of enterprises, and also facilitates their seamless connection with the formal financial system, thus reinforcing the inclusive nature of digital finance.

Downloads

Download data is not yet available.

References

[1] Guo Feng, WANG Jingyi, Wang Fang et al. Measuring the development of digital inclusive finance in China: Index compilation and spatial characteristics [J]. Economics (Quarterly Journal), 2019,19(04):1401-1418.

[2] Zhang Xun, WAN Guanghua, ZHANG Jiajia et al. Digital economy, pratt &whitney financial and inclusive growth [J]. Journal of economic studies, 2019, (8) : 71-86.

[3] Chen, Mr. Cao, Cao Yanan, etc. The development of digital finance and enterprise "from virtual to real" [J]. Research of Finance and Economics,2021,47(09):78-92

[4] Fernandes, C., Borges, M. R., & Caiado, J. (2021). The contribution of digital financial services to financial inclusion in Mozambique: an ARDL model approach. Applied Economics, 53(3), 400-409.

[5] Khera, P., Ng, S., Ogawa, S., & Sahay, R. (2022). Measuring digital financial inclusion in emerging market and development economies: A new index. Asian Economic Policy Review, 17(2), 213-230.

[6] Zhao Yaxiong, WANG Xiuhua. Digital finance, household relative income and Vulnerability: The impact of multi-dimensional "divide" [J]. Research on Finance,2022, No.508 (10): 77-97.

[7] Wu Fei, Xiang Hailing, Liu Xinyi. Digital finance and financial market stability: a perspective based on stock price crash risk [J]. Economist,2020, No.262(10):87-95.

[8] Zhang Yang, Mu Bo, Mu Zhen she. Digital pratt &whitney county agribusiness finance and banking development [J]. Journal of financial research, 2024, 50 (01) : 49-63.

[9] You Jia Xing, Lin hui, Liu Ying. Financial technology and bank performance: An empirical study based on 8227 bank branches [J]. Economics (Quarterly Journal), 2019,23(01):177-193.

[10] Wu Yu, LI Cheng shun, Li Xiao et al. Digital financial development to the traditional mechanism of the effect of private lending market and research [J]. Management world, 2020, 4 (1) : 53-64 + 138 + 65.

[11] Sheng Tian Xiang, fan never. Financial technology, the optimal banking market structure and small micro enterprise credit supply [J]. Journal of financial research, 2020 (6): 114-132.

[12] Zhong Kai, Liang Peng, xiao-dan dong, et al. Digital inclusive finance and secondary allocation of commercial credit [J] China Industrial Economy,2022, No.406(01):170-188.

[13] Zhao Shaoyang, Li Mengxue, SHE Kaiwen. Digital finance and financing availability for smes: micro-evidence from bank loans [J]. Economic Trends,2022, No.738(08):98-116.

[14] Demertzis, M., Merler, S. & Wolff, G.B. Capital markets union and the fintech opportunity[J]. Journal of Financial Regulation,2018,4(1):157-165.

[15] Yu Maomao, Zului, Li Jigang. Digital inclusive finance, bank-enterprise distance and real enterprise "from real to virtual" [J]. Modern Management Science,2024(01):176-186.

[16] Chu Y, Ye S,Li H,et al.Can Digitalization Foster Sustainable Financial Inclusion? Opportunities for both Banks and Vulnerable Groups[J]. Sustainability,2023,15(8).

[17] Li Xiaolin, Zong Yinping et al., The backbiting effect of non-financial enterprises' shadow banking business: from the perspective of corporate risk taking [J]. Study of finance and economics, 2022 (7), 13:124-137.

[18] Han Xun, Li Jianjun. Policy continuity, shadow banking of non-financial enterprises and social responsibility [J]. Financial Research, 2021, No.495(09):131-150.

[19] Han Xun, Li Jianjun. Policy Continuity, Shadow banking of non-financial Enterprises and Social responsibility [J]. Journal of Financial Research,2021,No.495(09):131-150.

[20] Si Dengkui, Li Yingjia et al., Banking competition and Shadow banking of non-financial enterprises in China [J]. Finance Research, 2022, No.506(08):171-188.

[21] Du Li, Qian Xuesong. Shadow banking, credit transmission and monetary policy effectiveness: Empirical evidence from the micro-perspective of entrusted loans of listed companies [J]. China's industrial economy, 2021, No. 401 (8): 152-170.

[22] Xiang Hujun, Zhou Xiong. After the army, chow hown. Shadow banking and its supervision from the perspective of liquidity hoarding [J]. Economic Research Journal,202,57(03): 100-117.

[23] Zhang, J., Bi, Z., Hu, M., & Meng, Q. (2023). Shadow banking and commercial bank: evidence from China. Applied Economics, 55(1), 72-89.

[24] Zhang Yilin, Liang Wei, YU Yunjun. Formation and governance mechanism of rigid payment in the development of shadow banking in China [J]. Economic Research Journal, 2023, 58(02):192-208.

[25] Bashir, U. (2023). Shadow banking, political connections and financial stability of Chinese banks: An empirical investigation. Applied Economics Letters, 30(10), 1333-1337.