Digital Finance And SME Innovation Sustainability

In the critical period of our country’s economic development mode transitioning to high-quality development,corporate innovation has a significant impact on technology precipitation,process level optimization,and even high-end industries.More importantly,any breakthrough in technical difficulties depends on continuous innovation investment and technology accumulation.This process of seeking qualitative change through quantitative change greatly tests the continuity of innovation activities of Chinese enterprises.The primary responsibility of finance is to serve the real economy.However,extensive financial repression has resulted in a "two-eighth differentiation" in the allocation of financial resources.Compared with large enterprises,it is more difficult for small and medium-sized enterprises to obtain financial support,and the innovation and sustainability of small and mediumsized enterprises are facing severe challenges.At the same time,with the application of digital technology in the financial field,the rapid development of digital finance bears the hope of eliminating various drawbacks of traditional financial service enterprises’ innovation activities and assisting the continuous promotion of enterprise innovation activities.It is of great practical significance for the manufacturing industry to supplement the chain and strengthen the chain,and then realize the high-end transformation of the industry.Regrettably,the current academic community has mainly discussed how digital finance affects corporate innovation,but there is still no empirical research on the sustainability of corporate innovation.Correspondingly,there is little information on how the development of digital finance affects the sustainability of corporate innovation activities.In the competition of great powers,the long-term construction of national strength and comprehensive competitiveness is more critical,so the continuous research of innovation needs to be paid attention to.Based on the combined data of listed companies on the Chi Next and SME board from 2011 to2020,this paper matches the digital financial inclusion development index at the prefecture city level,and uses a fixed effect model to investigate whether digital finance and its sub-indices have promoted the manufacturing industry.This paper discusses the continuity of innovation activities of small and medium-sized enterprises(SME),and discusses the corresponding mechanism of action and heterogeneity.The article consists of six parts,the research background and significance will be explained in the preface,followed by a detailed literature review of multiple research topics related to digital finance and corporate continuous innovation.Next,in the theoretical analysis part,the vivid practice of digital finance in China is demonstrated,which is intended to start from technical details and try to answer the persistent question of how digital finance affects corporate innovation.It is worth mentioning that the digital financial practice of CCB Fintech has a good representativeness,so this article will illustrate it as a digital financial case.In the rest of this chapter,this paper proposes a variety of hypotheses including the main research hypothesis,heterogeneity hypothesis,and mechanism hypothesis,and explains the seven hypotheses put forward one by one.The fourth part deals with research design and empirical analysis.The fifth part further improves the empirical part,including heterogeneity analysis,mechanism test and robustness test.The conclusions and policy recommendations of this paper are placed in the last chapter.The research results of this paper show that(1)the vivid practice of digital finance in our country has played a positive role in promoting the sustainability of innovation of small and medium-sized manufacturing enterprises,and it has promoted the continuous promotion of enterprise innovation investment.Under the background of the rapid expansion of digital finance coverage,which can be achieved by easing corporate financing constraints and improving profitability,while the depth of use of digital finance and the degree of digitization have no significant impact on the sustainability of corporate innovation.(2)From the perspective of enterprises and industries,the development of digital finance has a better supporting role for "SRDI" enterprises than non "SRDI " enterprises.(3)From the perspective of the region where the enterprise is located,digital finance has a more significant promoting effect on the innovation sustainability of enterprises in regions with relatively lagging economic development represented by the central and western regions.The research conclusions of this paper show that the vivid practice of digital finance in our country has played a positive role in promoting the continuous innovation activities of manufacturing small and medium-sized enterprises,and this promotion effect shows obvious differences in different regions,industries and different company characteristics.Qualitative,the policy side should adapt to local conditions and make the most of the situation.Actively promoting the practice of digital finance in our country while formulating forward-looking regulatory policies.