The impact of digital finance on the modernization of China’s industrial chain

In the pivotal era of global industrial transformation, digital finance has emerged as a key driver in enhancing the modernization of China’s industrial chain. This study, utilizing data from 30 Chinese provinces from 2012 to 2020, investigates the influence of digital finance on industrial chain modernization through fixed effects and spatial econometric models. Our findings indicate a significant, positive impact of digital finance on industrial chain modernization. Heterogeneity analysis reveals that the eastern region benefits more from digital finance than central and western regions, and its influence has been more pronounced after 2016. Mechanistically, digital finance positively affects industrial agglomeration, industrial structure optimization, and facilitates Innovation Achievements Transformation, albeit with varying effectiveness across subindicators. Further, we observe positive spatial spillovers for both digital finance and industrial chain modernization. While digital finance significantly enhances industrial chain modernization, its impact on adjacent regions is negligible. Importantly, digital finance exerts a positive influence on industrial chain modernization in both short-term and long-term scenarios. This research elucidates the interplay between digital finance and the modernization of China’s industrial chain.