Robustness Checks: Impact of Digital Finance on Commercial Credit Financing for Private Enterprises

Robustness Checks: Impact of Digital Finance on Commercial Credit Financing for Private Enterprises

This section presents a series of robustness checks conducted to ensure the reliability and validity of our findings regarding the positive impact of digital finance on commercial credit financing for private enterprises.

1. Replacing the Dependent Variable:

To assess the sensitivity of our results to the choice of dependent variable, we replaced the original dependent variable (TC) with alternative measures of commercial credit, namely TC2, TC3, and TC4, as defined in the variable definition table. These alternative measures represent different aspects or calculations of commercial credit. We then re-estimated the main regression model using these new dependent variables. The results, presented in Table 4, demonstrate that the regression coefficients remain statistically significant even after replacing the dependent variable. This finding confirms that our main conclusions are robust to different operationalizations of commercial credit.

2. Replacing the Independent Variable:

We further examined the robustness of our findings by replacing the overall digital inclusive finance index with its sub-indicators at the prefecture level. These sub-indicators capture different dimensions of digital financial inclusion. The regression results, displayed in Table 5, show that columns (1) to (3) continue to exhibit significant positive coefficients. This finding provides further evidence supporting the positive effect of digital finance on commercial credit financing for private enterprises. However, in column (4), the regression coefficient of the degree of digital transformation on commercial credit financing is not statistically significant.

One possible explanation for this insignificant result is that the degree of digital transformation index encompasses indicators such as mobile index, affordability index, credit index, and convenience index. These indicators primarily reflect the reach and accessibility of digital financial services for individual businesses and the general public, with a relatively limited impact on private enterprises. Therefore, the effect of the degree of digital transformation on commercial credit financing for private enterprises may not be as pronounced.

3. Adding Control Variables for Corporate Governance Characteristics:

Recognizing that the effectiveness of internal corporate governance can influence the scale of commercial credit financing for enterprises, we incorporated additional control variables at the corporate governance level into our regression model. The results, presented in Table 6, column (1), remain consistent with our previous findings, indicating that the positive relationship between digital finance and commercial credit financing for private enterprises holds even after controlling for corporate governance characteristics.