Abstract: Digital inclusive finance plays an important role in improving the innovation efficiency of small and medium-sized enterprises (SMEs). This article adopts the 2016-2021 Shanghai and Shenzhen A-share SME data and Peking Univercity Digital Inclusive Finance Index, based on the innovation value chain and stochastic frontier model, to deeply study themicro-influencing elements and processes to improve the innovation efficiency of Chinese SMEs, and empirically test the direction, degree and channel of the impact of digital inclusive finance on the innovation efficiency of SBMs. The study shows that the number of Chinese SMEs with innovation efficiency at the frontier is relatively small, and the reason for the overall low innovation efficiency is that most SMEs are facing difficulties in transforming their achievements. In the practice of the innovation value chain, digital inclusive finance plays a facilitating role in SMEs’ innovation R&D efficiency and results transformation efficiency, especially on the results transformation efficiency, and this facilitating role has a positive spatial spillover effect, so to improve China’s SMEs’ innovation efficiency should pay attention to its clustering effect. While directly alleviating the financing constraints of SMEs, digital inclusive finance can also reduce information asymmetry through the characteristics of digitization and inclusion, attract financing from other relevant financial institutions, thus indirectly alleviating the financing constraints of SMEs and promoting the improvement of SMEs’ innovation efficiency. Therefore, enhancing the development of digital inclusive finance is an effective way to improve the efficiency and quality of SME innovation.

Keywords: Digital inclusive finance; SMEs; Innovation efficiency; Financing constraints;  Information asymmetry