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How digital finance promotes technological innovation: Evidence from China

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  • Li, Jiayi
  • Ye, Shujun
  • Zhang, Yujin

Abstract

This article confirms the direct positive effect of digital finance on technological innovation and explores its regional heterogeneity. It further demonstrates the mediation effect from the fund supply side and product demand side of innovation, proving that digital finance stimulates technological innovation by promoting R&D investment and consumer demand. However, it was found that the mediation role of technology credit was not established, suggesting that the financial institution credit for research funding does not significantly drive innovation, digital finance mainly encourages innovation by promoting the supply of non-financial funds.

Suggested Citation

  • Li, Jiayi & Ye, Shujun & Zhang, Yujin, 2023. "How digital finance promotes technological innovation: Evidence from China," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006700
    DOI: 10.1016/j.frl.2023.104298
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    Cited by:

    1. Xie, Qichang & Wang, Dong & Bai, Qianwen, 2024. "“Cooperation” or “competition”: Digital finance enables green technology innovation—a new assessment from dynamic spatial spillover perspectives," International Review of Economics & Finance, Elsevier, vol. 93(PB), pages 587-601.
    2. Yang, Yang & Lin, Zibo & Xu, Zhaoyi & Liu, Shuwen, 2024. "The impact of digital finance on regional economic resilience," Pacific-Basin Finance Journal, Elsevier, vol. 85(C).
    3. Yang, Jinxuan & Hui, Ning, 2024. "How digital finance affects the sustainability of corporate green innovation," Finance Research Letters, Elsevier, vol. 63(C).
    4. He, Zuojing & Ge, Fangting & Ban, Shengxi & Min Du, Anna & Sheehan, Maura, 2024. "Fintech's influence on green credit provision: Empirical evidence from China’s listed banking sector," Research in International Business and Finance, Elsevier, vol. 70(PB).
    5. Zhu, Xiaoke & Wu, Hanqi & Deng, Qiyun, 2024. "Quantity or quality: Novel insights into the impact of digital finance on innovation," Finance Research Letters, Elsevier, vol. 65(C).

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    More about this item

    Keywords

    Digital finance; Technological innovation; R&D investment; Technology credit; Consumer demand;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G31 - Financial Economics - - Corporate Finance and Governance - - - Capital Budgeting; Fixed Investment and Inventory Studies

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