Abstract: In the context of Chinese financial system undergoing digital transformation, it is of great significance to explore the impact of digital finance development on the TFP of enterprises and its action mechanism. By making use of the panel data of A-share listed companies from 2011 to 2018 and employing the two-way fixed effect model, this paper conducts an empirical test. The findings show that the development of digital finance has effectively promoted the TFP of enterprises. In terms of structure, the covering range of digital finance is the major driving force, followed by the depth of usage, while the degree of digitization shows a U-shaped relationship with the total factor productivity of enterprises. With the help of multiple intermediary effect models, it is found that to relieve the financing restrictions and to promote innovation is the driving mechanism of digital finance development to compel the improvement of TFP of enterprises, in which the key is to promote innovation. In addition, in the identification of heterogeneous characteristics, it is found that the development of digital finance is more conducive to improving the total factor productivity of large-scale enterprises, enterprises in areas with higher marketization process, and enterprises in areas with lower regulatory intensity. Therefore, it is suggested to analyze the structural differences of digital finance in driving the growth of TFP of enterprises, and to improve the capability and efficiency in serving the real economy through financial innovation.

Key words: digital finance, total factor productivity, impact mechanism heterogeneity identification