The Impact of Digital Finance on Industrial Structure Upgrading and its Heterogeneity Analysis

In this paper, we use provincial panel data from China’s30 provinces spanning the years 2011 to 2021 to calculate the indices of industrial structure rationalization and advancement. Employing a fixed-effects model that accounts for fixed effect of year and province, we examine the impact of digital finance on the upgrading of industrial structures.The findings reveal that digital finance promotes both the rationalization and advancement of industrial structures.The regional divergences analysis reveals that digital finance significantly boosts industrial structure upgrading in the eastern region. However, its impact on the central and western regions is much less obvious.The analysis of region with varying financial development levels reveals that digital finance has a more pronounced effect on industrial structure upgrading in areas with high financial development.Through the mechanism analysis and empirical test, it is found that digital finance facilitates industrial structure upgrading through promoting the technology market development.

Keywords: Digital Finance, Rationalization of Industrial Structure, Advancement of Industrial Structure, Technology Market Development.