Heterogeneous impacts of financial inclusion on enterprise innovation: Evidence from China

This study assesses the impact of financial inclusion on innovation of enterprises, and draws a comparison between digital and traditional financial inclusion. This paper fills this gap as existing studies focus on the influence of digital finance inclusion. We conduct the study in China and construct an index to quantify financial inclusion, and analyzed how financial inclusion drives innovation by increasing the efficiency and output of enterprises. We find that enterprise innovation is directly related to digital financial inclusion but is inversely related to traditional financial inclusion. This evidence reveals characteristics of the relationship and inspire future research.