The Influence of Financial Inclusion: Evidence from Small and Medium-sized Enterprises

Abstract

Financial inclusion refers to providing financial support services in diverse forms to a wide range of beneficiaries, with particular attention to whether those who are disadvantaged in the financial market, such as the poor, residents in remote areas, and small and medium-sized enterprises (SMEs), can fairly access the financial products or services through formal channels. The preference of traditional financial institutions for state-owned enterprises and large corporations results in significant differences in the financial support available to different enterprises. This paper aims to analyze the impact of financial inclusion on the innovation of SMEs. We find that the financial inclusion policy enhance innovation activities of SMEs in China in various aspects. The findings lead to meaningful policy implications.