Digital finance and the agribusiness paradox: insurance-induced credit constraints and the transparency trap in low-marketization regions

Against the backdrop of digital inclusive finance, how to effectively alleviate financing constraints for agribusinesses not only aligns with the demands of rural revitalization but also facilitates the rational allocation of market resources. Existing research predominantly adopts a borrower-centric perspective, lacking systematic consideration of how digital inclusive finance influences lender behavior. This study, however, adopts a lender-centric approach, integrating the unique characteristics of agribusinesses and accounting for the moderating effect of agricultural insurance to examine the mechanism through which digital inclusive finance impacts financing constraints for these enterprises. Using a sample of Chinese agribusinesses from 2011 to 2022, a Difference-in-Differences (DID) model is established to analyze the roles of Tobin's Q and agricultural insurance in the influence process. The findings reveal that digital inclusive finance alleviates financing constraints for agribusinesses, with the impact exhibiting various qualitative aspects. Tobin's Q partially obscures the effect of digital inclusive finance on financing constraints, while agricultural insurance suppresses the alleviating role of digital inclusive finance in addressing these constraints.