Digitalization of banks and inclusive finance: New insights from cultural industry's financing constraints
It is revealed that the digital transformation of banks significantly increases loan allocations to SMEs within the cultural industry and this development toward inclusive finance is further substantiated by robust empirical evidence.
Abstract
The emergence of digital financial technology emerges as a promising solution, allowing banks to leverage unique digital footprints to alleviate information asymmetry and mitigate the light asset company's financing constraints. Through a theoretical analysis, we reveal that the digital transformation of banks significantly increases loan allocations to SMEs within the cultural industry. This development toward inclusive finance is further substantiated by robust empirical evidence, indicating a notable alleviation of financing constraints, and confirming the quantitative and structural transmission pathways influenced by bank digitalization.