Bridging social responsibility and grassroots finance: Evaluating the impact of firms' targeted pairing assistance on county digital financial inclusion

This study exploits the unique setting of China's 2016 mandate requiring firms to disclose their involvement in targeted pairing assistance (TPA) to explore the impact of corporate social responsibility (CSR) practices on digital financial inclusion (DFI) at the recipient county level. Using manually collected data, we employ a staggered difference-in-differences approach to examine how firms' targeted pairing assistance with counties affects DFI. Our results show that firms' pairing assistance, an innovative CSR practice, can significantly improve DFI in recipient counties. This remains robust after considering two-way fixed effects (TWFE) potential bias, endogeneity issues and robustness checks. Mechanism analysis shows that firms can leverage their financial expertise and CSR experience to broaden DFI coverage, while those with digitalization capabilities further advance the digitalization process. We also uncover pairing firms' alignment-through industry synergy and regional complementarity-which improves the impact of TPA on DFI. Overall, this paper provides new insights into the social benefits of CSR, shifting the research focus from the focal firm to its impact on beneficiaries.