【Abstract】

In the context of fast digitization of commercial and financial ecosystem in China, this study explores the impact of digital financial capability on household entrepreneurial performance. Utilizing China Household Finance Survey 2017 data, this paper is among the first to define and measure digital financial capability, showing that it has significant and positive influence on household business ownership, innovation and financial performance. The results still hold after addressing endogeneity. Furthermore, we illustrate how digital financial capability impacts household entrepreneurial performance by scrutinizing indirect effects of both commercial and financial channels. In addition, heterogeneity regarding vulnerable populations is also examined for deepening understanding of such relationships. This study calls attention to the importance of digital financial capability to better look upon the opportunities and challenges in real-time micro economic lives in China and beyond, providing insights on whether and how digital financial capability affects household entrepreneurial performance, as well as implications for emerging economics who are going through similar developing stages.

【Keywords】

digital financial capability; household entrepreneurial performance; business ownership; business innovation; business financial performance

【Authors】

Luo Yu, IMI Research Fellow, School of Finance, China Banking Research Center, China Financial Policy Research Center, Renmin University of China

Peng Yuchao, IMI Research Fellow, School of Finance, Central University of Finance and Economics

Zeng Lianyun, School of Finance, Chinese Academy of Financial Inclusion, Renmin University of China