IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v63y2024ics1544612324004355.html
   My bibliography  Save this article

Financial technology and firm productivity: Evidence from Chinese listed enterprises

Author

Listed:
  • Wang, Di
  • He, Bin
  • Hu, Zhimu

Abstract

Recent data show that the number of fintech investment deals is increasing, implying that fintech is gradually penetrating various industries and may have far-reaching impacts on industrial production and operations. This paper studies the impact of fintech on firm productivity and the mediating effects of financing constraints, information asymmetry and technological innovation. This paper collects data from 1662 samples of Chinese listed firms from 2011 to 2022 and screens the number of firms that meet the fintech criteria to construct the regional fintech development level. Our analysis shows that fintech has a positive effect on enhancing firm productivity. Path analysis reveals that digital transformation indirectly enhances firm productivity by reducing information asymmetry, easing financing constraints, and improving technological innovation. Our research introduces innovative approaches for developing indicators in financial technology. The insights generated from this study hold potential value for both entrepreneurs and governmental bodies.

Suggested Citation

  • Wang, Di & He, Bin & Hu, Zhimu, 2024. "Financial technology and firm productivity: Evidence from Chinese listed enterprises," Finance Research Letters, Elsevier, vol. 63(C).
    • Handle: RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324004355
    DOI: 10.1016/j.frl.2024.105405
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612324004355
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2024.105405?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Liudmila Zavolokina & Mateusz Dolata & Gerhard Schwabe, 2016. "The FinTech phenomenon: antecedents of financial innovation perceived by the popular press," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-16, December.
    2. Beck, Thorsten & Levine, Ross, 2004. "Stock markets, banks, and growth: Panel evidence," Journal of Banking & Finance, Elsevier, vol. 28(3), pages 423-442, March.
    3. Ding, Na & Gu, Leilei & Peng, Yuchao, 2022. "Fintech, financial constraints and innovation: Evidence from China," Journal of Corporate Finance, Elsevier, vol. 73(C).
    4. Andreas Fuster & Matthew Plosser & Philipp Schnabl & James Vickery, 2019. "The Role of Technology in Mortgage Lending," The Review of Financial Studies, Society for Financial Studies, vol. 32(5), pages 1854-1899.
    5. Benfratello, Luigi & Schiantarelli, Fabio & Sembenelli, Alessandro, 2008. "Banks and innovation: Microeconometric evidence on Italian firms," Journal of Financial Economics, Elsevier, vol. 90(2), pages 197-217, November.
    6. Olley, G Steven & Pakes, Ariel, 1996. "The Dynamics of Productivity in the Telecommunications Equipment Industry," Econometrica, Econometric Society, vol. 64(6), pages 1263-1297, November.
    7. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 70(2), pages 317-341.
    8. Mingfeng Lin & Nagpurnanand R. Prabhala & Siva Viswanathan, 2013. "Judging Borrowers by the Company They Keep: Friendship Networks and Information Asymmetry in Online Peer-to-Peer Lending," Management Science, INFORMS, vol. 59(1), pages 17-35, August.
    9. Kohtamäki, Marko & Parida, Vinit & Patel, Pankaj C. & Gebauer, Heiko, 2020. "The relationship between digitalization and servitization: The role of servitization in capturing the financial potential of digitalization," Technological Forecasting and Social Change, Elsevier, vol. 151(C).
    10. Rainer Alt & Roman Beck & Martin T. Smits, 2018. "FinTech and the transformation of the financial industry," Electronic Markets, Springer;IIM University of St. Gallen, vol. 28(3), pages 235-243, August.
    11. Bournakis, Ioannis & Mallick, Sushanta, 2018. "TFP estimation at firm level: The fiscal aspect of productivity convergence in the UK," Economic Modelling, Elsevier, vol. 70(C), pages 579-590.
    12. Anagnostopoulos, Ioannis, 2018. "Fintech and regtech: Impact on regulators and banks," Journal of Economics and Business, Elsevier, vol. 100(C), pages 7-25.
    13. Maskus, Keith E. & Neumann, Rebecca & Seidel, Tobias, 2012. "How national and international financial development affect industrial R&D," European Economic Review, Elsevier, vol. 56(1), pages 72-83.
    14. Andrew Kusiak, 2017. "Smart manufacturing must embrace big data," Nature, Nature, vol. 544(7648), pages 23-25, April.
    15. Li, Xiang & Su, Dan, 2022. "Total factor productivity growth at the firm-level: The effects of capital account liberalization," Journal of International Economics, Elsevier, vol. 139(C).
    16. Huang, Shuo, 2022. "Does FinTech improve the investment efficiency of enterprises? Evidence from China’s small and medium-sized enterprises," Economic Analysis and Policy, Elsevier, vol. 74(C), pages 571-586.
    17. Norden, Lars & Silva Buston, Consuelo & Wagner, Wolf, 2014. "Financial innovation and bank behavior: Evidence from credit markets," Journal of Economic Dynamics and Control, Elsevier, vol. 43(C), pages 130-145.
    18. Murinde, Victor & Rizopoulos, Efthymios & Zachariadis, Markos, 2022. "The impact of the FinTech revolution on the future of banking: Opportunities and risks," International Review of Financial Analysis, Elsevier, vol. 81(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhang, Qun & Qiu, Bin & Sun, Shaoqin, 2024. "Improving financial productivity and upgrading in global value chains," Finance Research Letters, Elsevier, vol. 67(PA).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Tang, Mengxuan & Hu, Yang & Corbet, Shaen & Hou, Yang (Greg) & Oxley, Les, 2024. "Fintech, bank diversification and liquidity: Evidence from China," Research in International Business and Finance, Elsevier, vol. 67(PA).
    2. Luo, Sumei & Sun, Yongkun & Yang, Fan & Zhou, Guangyou, 2022. "Does fintech innovation promote enterprise transformation? Evidence from China," Technology in Society, Elsevier, vol. 68(C).
    3. Zhang, Xiumin & Zhao, Tianyu & Wang, Linhui & Dong, Zhiqing, 2022. "Does Fintech benefit financial disintermediation? Evidence based on provinces in China from 2013 to 2018," Journal of Asian Economics, Elsevier, vol. 82(C).
    4. Fang, Yuxia & Li, Yuhua, 2024. "How does internet finance affect firm exports? Evidence from China," Research in International Business and Finance, Elsevier, vol. 71(C).
    5. Shiguang Li & Yixiang Tian, 2023. "How Does Digital Transformation Affect Total Factor Productivity: Firm-Level Evidence from China," Sustainability, MDPI, vol. 15(12), pages 1-17, June.
    6. Yong Ma & Yiqing Jiang, 2024. "Digital financial inclusion and corporate investment efficiency: Evidence from small‐ and medium‐sized enterprises in China," Review of Development Economics, Wiley Blackwell, vol. 28(3), pages 929-957, August.
    7. Lai, Xiaobing & Yue, Shujing & Guo, Chong & Zhang, Xinhe, 2023. "Does FinTech reduce corporate excess leverage? Evidence from China," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 281-299.
    8. Choudhary, Priya & Thenmozhi, M., 2024. "Fintech and financial sector: ADO analysis and future research agenda," International Review of Financial Analysis, Elsevier, vol. 93(C).
    9. Fan, Chenguang & Bae, Seongho & Liu, Yu, 2024. "Can FinTech transform corporate liquidity? Evidence from China," Innovation and Green Development, Elsevier, vol. 3(2).
    10. Zhang, Qizheng & Qian, Zesen & Wang, Shuo & Yuan, Lingran & Gong, Binlei, 2022. "Productivity drain or productivity gain? The effect of new technology adoption in the oilfield market," Energy Economics, Elsevier, vol. 108(C).
    11. Claudiu Tiberiu Albulescu & Camélia Turcu, 2022. "Productivity, financial performance, and corporate governance: evidence from Romanian R&D firms," Applied Economics, Taylor & Francis Journals, vol. 54(51), pages 5956-5975, November.
    12. Ren, Xiaohang & An, Yaning & Jin, Chenglu & Yan, Cheng, 2024. "Weathering the policy storm: How climate strategy volatility shapes corporate total factor productivity," Energy Economics, Elsevier, vol. 134(C).
    13. Nie, Zi & Ling, Xuan & Chen, Meian, 2023. "The power of technology: FinTech and corporate debt default risk in China," Pacific-Basin Finance Journal, Elsevier, vol. 78(C).
    14. Alam, M. Jahangir & Alvi, Eskander, 2024. "The long-run effects of monetary policy: The role of R&D investment in economic growth," Economic Modelling, Elsevier, vol. 137(C).
    15. Pacelli, Vincenzo & Miglietta, Federica & Foglia, Matteo, 2022. "The extreme risk connectedness of the new financial system: European evidence," International Review of Financial Analysis, Elsevier, vol. 84(C).
    16. Wang, Yichen & Hu, Jun & Chen, Jia, 2023. "Does Fintech facilitate cross-border M&As? Evidence from Chinese A-share listed firms," International Review of Financial Analysis, Elsevier, vol. 85(C).
    17. Segundo Camino‐Mogro & Natalia Bermudez‐Barrezueta, 2021. "Productivity determinants in the construction sector in emerging country: New evidence from Ecuadorian firms," Review of Development Economics, Wiley Blackwell, vol. 25(4), pages 2391-2413, November.
    18. Michael L. Polemis & Mike G. Tsionas, 2022. "Endogenous productivity: a new Bayesian perspective," Annals of Operations Research, Springer, vol. 318(1), pages 425-451, November.
    19. Christian Abele & Agnès Bénassy-Quéré & Lionel Fontagné, 2020. "One Size Does Not Fit All: TFP in the Aftermath of Financial Crises in Three European Countries," PSE Working Papers halshs-02883685, HAL.
    20. Yuying Gao & Shanyue Jin, 2022. "Corporate Nature, Financial Technology, and Corporate Innovation in China," Sustainability, MDPI, vol. 14(12), pages 1-22, June.

    More about this item

    Keywords

    Fintech; Firm productivity; Information asymmetry; Financing constraint; Technological innovation;
    All these keywords.

    JEL classification:

    • C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Spatio-temporal Models
    • P33 - Political Economy and Comparative Economic Systems - - Socialist Institutions and Their Transitions - - - International Trade, Finance, Investment, Relations, and Aid
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:63:y:2024:i:c:s1544612324004355. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.