Is there a nonlinear economic threshold effect of financial development on the efficiency of sci‐tech innovation? An empirical test from the Yangtze River Economic Belt

As the core element of technological innovation, financial resources can play the role of financial support, risk sharing, service guidance, and other aspects, thereby enhancing the efficiency of sci‐tech innovation (STIE). Whether there is a complex nonlinear economic threshold effect of financial development (FD) on STIE in different regional context is worth further discussion. This paper selects the Yangtze River Economic Belt (YREB) of China as the research object, based on the panel data of 110 cities, uses the Hansen threshold model to test the nonlinear “economic threshold effect” of FD on STIE. The results show that under different development scenarios in different regions, FD has a nonlinear “economic threshold effect” on STIE. This study extends the research sample to the cities of river basin, and elucidating the importance of regional context to the nonlinear “economic threshold effect” of FD on STIE further proposes that the sole focus of promoting the quantity of technology innovation by taking advantage of FD do not guarantee a positive effect on the development of STIE. Instead, the diverse, multiple financial policy instruments and stimulating the driving force of FD should be adopted towards the improvement of STIE in a phased and context specific manner.