Home country digital finance development and post-entry internationalization speed of emerging market SMEs: Empirical evidence from China

Digital finance development (DFD) has profoundly impacted various aspects of our society. This study investigates how home country DFD affects the post-entry internationalization speed (PIS) of small and medium-sized enterprises (SMEs) in emerging markets. Using data on Chinese manufacturing SMEs from 2011 to 2020, we find that home country DFD exerts a significantly positive impact on emerging market SMEs' PIS. In particular, this positive impact is especially pronounced for SMEs led by CEOs with overseas experience, those in high-tech industries, and those in home country regions with a high level of traditional finance development. The mechanism analysis demonstrates that home country DFD enhances SMEs' PIS through two channels: easing firm financing constraints and improving firm productivity. Our findings advance the knowledge about the economic effects of DFD and the determinants of PIS.