How does FinTech development drive corporate innovation? Fresh evidence from the perspective of financial supply
Abstract
By constructing a city-level financial-technology (FinTech) development dataset, this study examines the impact of FinTech on corporate-innovation behavior from a financial-supply perspective. The results reveal that FinTech promotes corporate innovation by reducing corporate-financing constraints and financing costs, alleviating information asymmetry, and expanding financing channels. This promotion effect is more pronounced for private, small, and young firms, firms with fewer fixed assets, and those located in low-regulation intensity areas. Moreover, credit-based FinTech companies have a greater impact on business innovation. In addition, bank deregulation and increased bank competition crowd out the financial supply of FinTech for innovation financing. Knowledge of these impacts can help corporate managers, governments, and financial regulators to formulate more effective development strategies to promote corporate innovation.
First published online 15 November 2024
Keyword : FinTech, financial supply, corporate innovation, bank competition
How to Cite
Lee, C.-C., Fang, L., Zhao, J., Yu, C.-H., & Zhang, J. (2024). How does FinTech development drive corporate innovation? Fresh evidence from the perspective of financial supply. Technological and Economic Development of Economy, 1-36. https://doi.org/10.3846/tede.2024.22192
This work is licensed under a Creative Commons Attribution 4.0 International License.
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Financial Stability Board. (2017). Fintech credit: Market structure, business models and financial stability implications. https://www.bis.org/publ/cgfs_fs b1.pdf
Fleisher, B. M., McGuire, W. H., Wang, X., & Zhao, M. Q. (2021). Induced innovation: Evidence from China’s secondary industry. Applied Economics, 53(52), 6075–6093. https://doi.org/10.1080/00036846.2021.1937037
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