Abstract: Chinese enterprises have intensified their usage of short-term loans as long-term investment
given the mismatch between the supply and demand of long-term credit funds in the financial market. Based on
the data of China’s A-share listed companies from 2011 to 2020 and the digital inclusive financial index, this
study finds that although short-term loans used as long-term investment can temporarily meet the financing
needs of enterprises, they will significantly lower their total factor productivity; the development of digital
inclusive finance effectively alleviates such a negative impact on the total factor productivity in that it improves
the accessibility of financial services to users, supplies more diversified financial services, eases the financing
constraints of enterprises, increases innovation investment and reduces inefficient investment; and the effect of
digital inclusive finance significantly varies according to the ownership nature of an enterprise, regional
financial efficiency and enterprise scale. It is essential for all regions to accelerate the development of digital
inclusive finance, so as to promote the reform of traditional financial markets, prevent and resolve major
financial risks, reduce enterprises’short-term loans used as long-term investment and their negative effects,
improve the total factor productivity and market competitiveness of enterprises, and constantly promote their
high-quality development.

Key words: short-term loans used as long-term investment, digital inclusive finance, total factor productivity, financing constraints, inefficient investment