Abstract: Based on the urban panel data from 2011 to 2018, this paper calculates the total factor productivity of the financial industry. It also applies DID and instrumental variable method to test the impact of digital inclusive finance on the total factor productivity of the financial industry. The findings show that, firstly, the development of digital inclusive finance can significantly reduce the total factor productivity of the financial industry, and that this inhibitory effect is also reflected on the impact on technical efficiency and scientific and technological progress efficiency. The coverage of digital inclusive finance only has a restraining effect on the total factor productivity of the financial industry. The depth of the usage only has an inhibition effect on the total factor productivity of the financial industry and the technical efficiency, while the degree of digital support service has inhibitory effects on all the three, i.e., the TFP of the financial industry, the technical efficiency and the scientific and technological progress efficiency. Secondly, the mechanism that digital inclusive finance inhibits the total factor productivity of financial industry can be explained by the “resource competition hypothesis”. Thirdly, if the administrative levels of the cities are different, the interactive relationship between digital inclusive finance and total factor productivity of financial industry will be the same, but the interactive mechanism will be different. Therefore, it is necessary to carry out the different policies against the characteristics of the financial institutions, promote the digital transformation of the financial institutions, and improve the digital technological level of the financial sector.

Key words: digital inclusive finance, total factor productivity of the financial industry, technical efficiency, the efficiency of scientific and technological progress