At present, new agricultural business entities still face shortcomings and constraints such as diversification of financing scale and financing term structure, differentiation of financial services, etc., and the problems of difficult financing, expensive financing, and high risks are particularly prominent, among which insufficient financial support has become one of the key reasons hindering the further development of new agricultural business entities. Digital finance can enable the supply of financial services to cover rural areas and farmers, and provide sufficient capital elements for the creation of new agricultural business entities.

This paper uses data from the “Thousand-village Survey” conducted by Shanghai University of Finance and Economics in 2023, and employs the Instrumental Variables Method, Extended Regression Model, Endogenous Switching Probit Model, and other methods to empirically examine the impact and mechanism of digital finance on the cultivation of new agricultural business entities from the micro-farmer level. The study finds that the use of digital finance has a significant positive impact on the cultivation of new agricultural business entities. Mechanism testing reveals that this effect is mainly achieved through the dual path of alleviating credit constraints and enhancing risk prevention capabilities. Heterogeneity analysis shows that the role of digital finance in the cultivation of new agricultural business entities is more reflected in hilly areas, but does not vary according to the individual material capital of farmers. Expansion analysis shows that the promotion effect of digital financial use is mainly reflected in large-scale grain farmers and farmer cooperatives, and it is not significant for family farms. In addition, digital finance also improves the quality and efficiency of the development of new agricultural business entities.

The marginal contributions of this paper are as follows: First, it explores the agricultural support effect of digital finance on the cultivation of new agricultural business entities from the micro-farmer level, broadening the perspective of relevant research and supplementing the study of the agricultural support effect of digital finance. Second, based on the dual dimensions of credit constraints and risk prevention, it constructs a theoretical framework for digital finance to promote the cultivation of new agricultural business entities, enriching the mechanism research on the agricultural support effect of digital finance and providing references for government departments to formulate targeted policies for the promotion of digital finance. Third, it reveals the long-term effect of digital finance on the development of new agricultural business entities from quantity to quality, providing ideas for understanding the impact of digital finance on the quality and efficiency of the development of new agricultural business entities.