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Purpose This paper examines whether digital inclusive finance alleviates SMEs’ financing constraints and identifies the underlying mechanisms. It further explores whether these effects vary by ownership structure, industry type, and regulatory environment, and whether easing financing constraints improves firm performance. Design/methodology/approach This study develops a four-sector theoretical model to analyse how digital inclusive finance influences SME financing constraints through cost and information channels. A composite financing-constraint index is constructed using liquidity, profitability, and robustness indicators. Using panel data on Chinese GEM-listed SMEs from 2015–2022, the analysis employs year- and city-level fixed effects, instrumental-variables estimation, mechanism tests, and heterogeneity analyses. Findings Digital inclusive finance significantly reduces SMEs’ financing constraints, with the effects persisting over time. Cost reduction and improved information transparency are the main transmission channels. Easing financing constraints enhances firm performance. The effects are stronger for non-state-owned firms, high-tech enterprises, and firms located in regions with lower regulatory intensity. Originality/value This study integrates theoretical modelling, mechanism analysis, and economic consequences into a unified framework. It proposes a novel composite measure of financing constraints and distinguishes SME risk types within a four-sector model. The findings provide new evidence on the heterogeneous and performance-enhancing effects of digital inclusive finance on SMEs.
Bu et al. (Mon,) studied this question.