The 5th Academic Luncheon of the Digital Technology and Finance

Abstract:
Can digital finance improve the performance of enterprises, and does both small and large enterprises benefit from such technological progress? Based on the national tax survey data, this paper analyzes the impact of digital finance on the firm's performance and explores the asymmetric effect of digital finance on enterprises of different scales. Firstly, based on a fintech index developed by PKU and a policy that aims at enhancing financial technology, we implement both an OLS regression and a difference-in-difference model, to study whether digital finance can improve the performance of enterprises. Secondly, our findings suggest that digital finance has an asymmetric effect on improving firm performance; specifically, SMEs benefit from digital finance, while large enterprises suffer. Finally, we show that SMEs benefit more from digital finance in the competitive industry, while the performance of large enterprises decreases due to competition; besides, our findings suggest that digital finance increases enterprises' financing, capital investment, and R&D investment, therefore enhancing enterprises' performance; furthermore, our evidence demonstrates that the positive effect of digital finance on R&D and human capital investment is stronger among SMEs, which helps to explain the asymmetric impact of digital finance on improving enterprises' performance. To sum up, this study explores whether and how digital finance improves enterprises' business performance and sheds light on the direction of subsequent digital finance development and policy formulation.

Speaker Introduction:
Yonghao Xu is a lecturer at the School of Finance, Zhongnan University of Economics and Law. He has a bachelor's degree in mathematics and application from the School of Mathematical Sciences, Peking University, a bachelor's degree in economics from the National School of Development, Peking University, and a doctorate in finance from the Guanghua School of Management, Peking University. His main research focuses on the study of financial technology, behavioral finance, household finance and asset pricing. The main research results have been published in Economics Letters and Management World.