Research On The Entrepreneurial And Innovative Effects Of Digital Inclusive Finance From The Perspective Of Urban-Rural Divide

The imbalance and insufficient development issues within the primary contradictions of Chinese society are prominently manifested in the imbalance of urban and rural development,as well as the insufficient development of rural areas.Promoting urban-rural integration and rural revitalization hinges on optimizing resource allocation and achieving prosperous industries.Improving the financial supply and service levels in urban and rural areas,and promoting industrial development and economic efficiency through entrepreneurship and innovation,is an important path.In traditional financial markets,the entrepreneurial and innovative activities in urban and rural areas commonly face financing constraints due to various financial e xclusion factors.Currently,the innovative development of digital inclusive finance has transformed the means and service modes of financial supply,exhibiting significant advantages in alleviating financing constraints in urban and rural areas.Leveraging the development of digital inclusive finance to enhance the level of financial supply and service quality,and promoting entrepreneurial and innovative activities in urban and rural areas,holds great significance for improving urban-rural relationships and achieving regional coordinated development.However,existing research in this area has not sufficiently focused on underdeveloped counties and urban-rural areas as research subjects and scales.There is also insufficient attention to aspects such as entrepreneurial types,industry structures,and innovation effects in the research content,as well as a lack of consideration for urban-rural differences in the research perspective.This paper constructs a theoretical framework for the entrepreneurial and innovative effects of digital inclusive finance from the perspective of urban-rural differences.Based on the definition of core concepts,it examines the relationship between entrepreneurship,innovation,and financial supply,summarizes the characteristics of insufficient financial supply in counties and urban-rural areas,and identifies the micro,meso,and macro-level functions of digital inclusive finance in improving financial supply.From the perspective of endogenous and exogenous financing,the pa per analyzes in detail the theoretical logic of how digital inclusive finance promotes entrepreneurial and innovative activities in urban and rural areas,demonstrates how digital inclusive finance manifests in specific terms between urban and rural areas,and discusses its heterogeneous characteristics in different types of entrepreneurship,industry structures,and innovation types.In the empirical analysis,taking into account sample representativeness and data availability,seven provinces,including Jilin,Gansu,Henan,Hunan,Jiangsu,Fujian,and Guizhou,are selected as the research objects at the county level from 2015 to 2020.Business registration and patent application data at the county level are collected,and Beijing University’s Digital Inclu sive Finance Index,publicly available internet data,and official statistics are combined.Using econometric methods such as the fixed effects model,2SLS model,mediation effects model,and grouped regression,the study empirically analyzes the entrepreneurial and innovative effects of digital inclusive finance within counties and between urban and rural areas,as well as their differences.The paper concludes with a series of summarized findings.Firstly,digital inclusive finance has a significant entrepreneurial effect within counties,as it promotes the increase of new startup enterprises in both urban and rural areas.Moreover,it significantly narrows the entrepreneurial gap between urban and rural regions.The robustness tests and endogeneity analysis support this conclusion.The entrepreneurial effect of digital inclusive finance exhibits heterogeneity in terms of entrepreneurial types.Compared to informal entrepreneurial activities,digital inclusive finance has a more significant impact on promot ing formal entrepreneurship.It can simultaneously reduce the urban-rural gap in both formal and informal entrepreneurship,but its effect on narrowing the gap in formal entrepreneurship is greater.The entrepreneurial effect of digital inclusive finance a lso exhibits heterogeneity in industry structures,but it does not significantly reduce the urban-rural gap within each industry.The entrepreneurial effect of digital inclusive finance is mainly evident in the manufacturing and service sectors,while its impact on the agricultural sector is not significant.In rural areas,the service sector plays a dominant role,while in urban areas,the manufacturing sector is predominant.Secondly,digital inclusive finance can reduce the entrepreneurial gap between ur ban and rural areas by alleviating financing constraints.There is an interactive effect between traditional finance and digital inclusive finance,which promotes formal entrepreneurial activities,with a more pronounced impact in rural areas.Financial regulation facilitates the entrepreneurial effect of digital inclusive finance and helps to narrow the entrepreneurial gap between urban and rural areas,with a more significant influence on formal entrepreneurship.The improvement of digital infrastructure supply levels positively adjusts the entrepreneurial effect of digital inclusive finance,primarily in urban areas and formal entrepreneurship,but it does not significantly promote the reduction of the entrepreneurial gap between urban and rural areas.Thirdly,digital inclusive finance exhibits significant innovation effects within counties and between urban and rural areas.It promotes the growth of patent applications in both urban and rural regions.However,it does not have a significant impact on nar rowing the innovation gap between urban and rural areas.The results,after robustness tests and endogeneity analysis,still support this conclusion.The innovation effect of digital inclusive finance shows heterogeneity in terms of innovation types.This innovation effect is primarily observed in the application of utility model patents,while there is insufficient evidence regarding its impact on invention patents and design patents.Fourthly,digital inclusive finance indirectly contributes to innovation effects through its entrepreneurial effect,with the entrepreneurial effect serving as a mediator in the innovation process.This mediation mechanism is primarily achieved through formal entrepreneurship.By promoting formal entrepreneurship,digital inclusive finance significantly enhances innovation output in urban and rural areas,with a more pronounced effect in rural areas.Additionally,digital inclusive finance has a positive interactive effect with traditional finance,jointly exerting innovation e ffects,particularly in rural areas and utility model patent applications.Enhanced financial regulation facilitates the innovation effects of digital inclusive finance.Under weak regulatory conditions,the mediation mechanism of the entrepreneurial effect of digital inclusive finance has a greater impact.Under strong regulatory conditions,the direct effects of digital inclusive finance become more apparent.A higher level of digital infrastructure supply positively adjusts the innov ation effects of digital inclusive finance,benefiting not only its direct innovation effects but also promoting its indirect impact through the entrepreneurial effect.Digital inclusive finance can promote innovation output between urban and rural areas,especially in more favorable market environments,with a greater impact in rural areas.However,its innovation effects are significantly constrained in poorer market environments.This research demonstrates its innovative contributions in the following as pects:(1)Scale and Focus: This study narrows down the research scale to the county level and focuses on specific towns and villages,aiming to explore the entrepreneurial and innovation effects of digital inclusive finance within counties and between urban and rural areas.It pays more attention to the regional disparities between urban and rural areas.(2)Heterogeneity: The research reveals that the entrepreneurial effect of digital inclusive finance exhibits heterogeneity not only in terms of entrepren eurial types but also in terms of industry structures.(3)New Physical Exclusion: This study incorporates the concept of "New Physical Exclusion",which arises from the imbalance in digital infrastructure supply,into the research on digital inclusive finance.(4)Utilization of Multiple Data Sources: This research extensively employs non-statistical data and data from various sources,leveraging their advantages in terms of accuracy,availability,timeliness,and objectivity.These innovative aspects contribute to a comprehensive understanding of the entrepreneurial and innovation effects of digital inclusive finance in the context of urban-rural disparities,highlighting the importance of considering regional differences and addressing new challenges such as New Physical Exclusion.The utilization of diverse data sources enhances the robustness and richness of the research findings.