Abstract: After digital finance alleviates financing constraints for small and medium-sized enterprises(SMEs), whether these enterprises will focus on their core business development or engage in cross-sector operations represents a significant practical issue. Unlike existing studies that primarily emphasize the impact of digitalization on corporate diversification, this research specifically examines SMEs and considers digital finance as a novel approach to easing their funding constraints. Using data from SMEs listed on the A-share market between 2011 and 2023, the study analyzes the influence of digital finance on SMEs' business structure from both diversification and specialization perspectives. Empirical findings indicate that digital finance significantly promotes business diversification among SMEs while inhibiting business specialization. These conclusions remain robust after a series of reliability and endogeneity tests. The effect of digital finance in promoting business diversification is more pronounced in emerging industries and among SMEs with poorer performance. As managerial risk-taking propensity increases, the positive impact of digital finance on business diversification becomes stronger. The underlying mechanisms through which digital finance fosters diversification include alleviating financing constraints, increasing agency costs, and enhancing competition within the financial industry. Furthermore, while the adoption of diversification strategies by SMEs reduces financial performance, it improves capital performance. The research findings extend the understanding of factors influencing SMEs' business structure and provide a new perspective for comprehending the microeconomic consequences of digital finance.

Key words: digital finance, small and medium-sized enterprises(SMEs), business structure, managerial risk-taking