The impact of digital finance on firms' digital Transformation: Mechanism analysis based on enterprise financing

In the context of the digital economy, exploring the impact of digital finance on firms' digital transformation not only helps clarify the influencing factors of digital transformation and enhances the new productivity of firms, but also clarifies the functional role of digital finance in the development of the digital economy. This paper analyzes the impact of digital finance on firms' digital transformation from two perspectives: the economic functions of digital finance and the external driving forces of corporate development. It further examines the mechanism through which digital finance influences firms' digital transformation from the perspective of financing constraints and financing channels. Based on sample data from China's A-share listed companies from 2015 to 2022, fixed-effects models are constructed for empirical research. The results show that digital finance can alleviate firms' financing constraints, expand firms' financing channels, and promote their digital transformation. Improving enterprise financing is an important mechanism through which digital finance facilitates firms' digital transformation. Heterogeneity analysis results indicate that the development of digital finance is more effective in promoting digital transformation among small-scale firms and non-state-owned enterprises.