Digital financial inclusion and innovation efficiency in hydrogen energy enterprises: Evidence from China

Improving innovation efficiency (IE) of hydrogen energy enterprises (HEEs) is critical for energy decarbonization, yet these firms face unique financing barriers due to protracted research and development (R&D) cycles (typically 3-10 years) and substantial capital requirements. This study examines whether digital financial inclusion (FI) is associated with enhanced IE in this distinctive context. Using a sample of Chinese HEEs from 2014 to 2022, we employ Data Envelopment Analysis (DEA) to measure IE and panel Tobit models for estimation. The results reveal a robust positive association: a one-standard-deviation increase in FI corresponds to a 14.5% improvement in IE. Mechanism analysis identifies two channels-reduced financing costs and lower financial risk. FI is associated with both high-quality and general innovation, with effects on high-quality innovation requiring sustained financing to materialize. Heterogeneity analysis shows that the positive association is more pronounced for non-state-owned enterprises, firms facing severe financing constraints, and small enterprises-patterns that reflect HEEs' particular vulnerability to funding disruptions during lengthy R&D cycles. These findings offer new insights into how FI can address industry-specific financing frictions and enhance IE in capital-intensive, long-cycle sectors.