IDEAS home Printed from https://ideas.repec.org/a/eee/streco/v67y2023icp439-458.html
   My bibliography  Save this article

Can FinTech development pave the way for a transition towards inclusive growth: Evidence from an emerging economy

Author

Listed:
  • Fan, Shuangshuang
  • Wei, Yuetong
  • Niu, Xiao
  • Balezentis, Tomas
  • Agnusdei, Leonardo

Abstract

This study investigates the impact of financial technology (FinTech) on inclusive growth (IG) by exploiting a panel of 281 prefecture-level Chinese cities in the years 2011–2020 using the spatial econometric model and machine learning algorithm. The results show that FinTech positively impacts IG, while there is no spatial spillover effect. The evidence from the machine learning algorithms suggests that as FinTech advances to a higher level, its positive impact on IG increases. The mechanism test shows that the latter effect is achieved through entrepreneurial stimulation and human capital enhancement. Moreover, the impact of FinTech on IG is more pronounced in large and medium-sized cities and cities in the eastern region. However, it does not significantly affect small cities or cities in the central region. This paper, therefore, offers new insights on the interaction between FinTech and IG along with the analysis of the effects related to the development of FinTech on IG in China.

Suggested Citation

  • Fan, Shuangshuang & Wei, Yuetong & Niu, Xiao & Balezentis, Tomas & Agnusdei, Leonardo, 2023. "Can FinTech development pave the way for a transition towards inclusive growth: Evidence from an emerging economy," Structural Change and Economic Dynamics, Elsevier, vol. 67(C), pages 439-458.
    • Handle: RePEc:eee:streco:v:67:y:2023:i:c:p:439-458
    DOI: 10.1016/j.strueco.2023.09.009
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0954349X23001273
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.strueco.2023.09.009?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. Shuming Ren & Lianqing Li & Yueqi Han & Yu Hao & Haitao Wu, 2022. "The emerging driving force of inclusive green growth: Does digital economy agglomeration work?," Business Strategy and the Environment, Wiley Blackwell, vol. 31(4), pages 1656-1678, May.
    2. Benos, Nikos & Karagiannis, Stelios, 2016. "Do education quality and spillovers matter? Evidence on human capital and productivity in Greece," Economic Modelling, Elsevier, vol. 54(C), pages 563-573.
    3. Niu, Geng & Jin, XiaoShu & Wang, Qi & Zhou, Yang, 2022. "Broadband infrastructure and digital financial inclusion in rural China," China Economic Review, Elsevier, vol. 76(C).
    4. Zeng, Lijun & Zhao, Yue & Wang, Xilian, 2022. "How to develop the new urbanization in mineral resources abundant regions in China? A VIKOR-based path matching model," Resources Policy, Elsevier, vol. 79(C).
    5. Radmehr, Riza & Henneberry, Shida Rastegari & Shayanmehr, Samira, 2021. "Renewable Energy Consumption, CO2 Emissions, and Economic Growth Nexus: A Simultaneity Spatial Modeling Analysis of EU Countries," Structural Change and Economic Dynamics, Elsevier, vol. 57(C), pages 13-27.
    6. Sharma, Ashutosh & Chauhan, Ranchan & Singh, Tej & Kumar, Anil & Kumar, Raj & Kumar, Anil & Sethi, Muneesh, 2017. "Optimizing discrete V obstacle parameters using a novel Entropy-VIKOR approach in a solar air flow channel," Renewable Energy, Elsevier, vol. 106(C), pages 310-320.
    7. Jie Wu & Steven Si, 2018. "Poverty reduction through entrepreneurship: incentives, social networks, and sustainability," Asian Business & Management, Palgrave Macmillan, vol. 17(4), pages 243-259, September.
    8. Hodula, Martin, 2023. "Fintech credit, big tech credit and income inequality," Finance Research Letters, Elsevier, vol. 51(C).
    9. Abbi Kedir & Euphrasie Kouame, 2022. "FinTech and women’s entrepreneurship in Africa: the case of Burkina Faso and Cameroon," Journal of Cultural Economy, Taylor & Francis Journals, vol. 15(4), pages 452-467, July.
    10. Djahini-Afawoubo, Dossè Mawussi & Couchoro, Mawuli Kodjovi & Atchi, Fambari Kokou, 2023. "Does mobile money contribute to reducing multidimensional poverty?," Technological Forecasting and Social Change, Elsevier, vol. 187(C).
    11. Josephine Ofosu‐Mensah Ababio & Edward Attah‐Botchwey & Eric Osei‐Assibey & Charles Barnor, 2021. "Financial inclusion and human development in frontier countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 26(1), pages 42-59, January.
    12. Zhaobin Fan & Ruohan Zhang, 2017. "Financial Inclusion, Entry Barriers, and Entrepreneurship: Evidence from China," Sustainability, MDPI, vol. 9(2), pages 1-21, February.
    13. Oyinlola, Mutiu A. & Adedeji, Abdulfatai A. & Onitekun, Olumide, 2021. "Human capital, innovation, and inclusive growth in sub-Saharan African Region," Economic Analysis and Policy, Elsevier, vol. 72(C), pages 609-625.
    14. Ahmad, Sohail & Puppim de Oliveira, Jose A., 2016. "Determinants of urban mobility in India: Lessons for promoting sustainable and inclusive urban transportation in developing countries," Transport Policy, Elsevier, vol. 50(C), pages 106-114.
    15. Frost, Jon & Gambacorta, Leonardo & Gambacorta, Romina, 2022. "On the nexus between wealth inequality, financial development and financial technology," Journal of Economic Behavior & Organization, Elsevier, vol. 202(C), pages 429-451.
    16. Wang, Xiuhua & Wang, Yipeng & Zhao, Yaxiong, 2022. "Financial permeation and rural poverty reduction Nexus: Further insights from counties in China," China Economic Review, Elsevier, vol. 76(C).
    17. Lee, Chien-Chiang & Lou, Runchi & Wang, Fuhao, 2023. "Digital financial inclusion and poverty alleviation: Evidence from the sustainable development of China," Economic Analysis and Policy, Elsevier, vol. 77(C), pages 418-434.
    18. Ma, Guangcheng & Cao, Jianhua & Famanta, Mahamane, 2023. "Does the coordinated development of two-way FDI increase the green energy efficiency of Chinese cities? Evidence from Chinese listed companies," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 59-77.
    19. Luo, Sumei & Sun, Yongkun & Zhou, Rui, 2022. "Can fintech innovation promote household consumption? Evidence from China family panel studies," International Review of Financial Analysis, Elsevier, vol. 82(C).
    20. Molla, Alemayehu & Biru, Ashenafi, 2023. "The evolution of the Fintech entrepreneurial ecosystem in Africa: An exploratory study and model for future development," Technological Forecasting and Social Change, Elsevier, vol. 186(PA).
    21. Akbari, Amir & Ng, Lilian & Solnik, Bruno, 2021. "Drivers of economic and financial integration: A machine learning approach," Journal of Empirical Finance, Elsevier, vol. 61(C), pages 82-102.
    22. Thorsten Beck & Vasso Ioannidou & Larissa Schäfer, 2018. "Foreigners vs. Natives: Bank Lending Technologies and Loan Pricing," Management Science, INFORMS, vol. 64(8), pages 3792-3820, August.
    23. Opricovic, Serafim & Tzeng, Gwo-Hshiung, 2004. "Compromise solution by MCDM methods: A comparative analysis of VIKOR and TOPSIS," European Journal of Operational Research, Elsevier, vol. 156(2), pages 445-455, July.
    24. Zhang, Huafeng, 2017. "Opportunity or new poverty trap: Rural-urban education disparity and internal migration in China," China Economic Review, Elsevier, vol. 44(C), pages 112-124.
    25. Liqing Huang & Bangzhu Zhu & Ping Wang & Julien Chevallier, 2022. "Energy out-of-poverty and inclusive growth: Evidence from the China health and nutrition survey," Post-Print halshs-04250294, HAL.
    26. Yang, Lihong & Wang, Shixun, 2022. "Do fintech applications promote regional innovation efficiency? Empirical evidence from China," Socio-Economic Planning Sciences, Elsevier, vol. 83(C).
    27. Huang, Liqing & Zhu, Bangzhu & Wang, Ping & Chevallier, Julien, 2022. "Energy out-of-poverty and inclusive growth: Evidence from the China health and nutrition survey," Structural Change and Economic Dynamics, Elsevier, vol. 60(C), pages 344-352.
    28. Karim, Sitara & Naz, Farah & Naeem, Muhammad Abubakr & Vigne, Samuel A., 2022. "Is FinTech providing effective solutions to Small and Medium Enterprises (SMEs) in ASEAN countries?," Economic Analysis and Policy, Elsevier, vol. 75(C), pages 335-344.
    29. Yang, Tong & Zhang, Xun, 2022. "FinTech adoption and financial inclusion: Evidence from household consumption in China," Journal of Banking & Finance, Elsevier, vol. 145(C).
    30. Angelopulo, George, 2021. "A comparative measure of inclusive urbanisation in the cities of Africa," World Development Perspectives, Elsevier, vol. 22(C).
    31. Amponsah, Mary & Agbola, Frank W. & Mahmood, Amir, 2021. "The impact of informality on inclusive growth in Sub-Saharan Africa: Does financial inclusion matter?," Journal of Policy Modeling, Elsevier, vol. 43(6), pages 1259-1286.
    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. Xie, Chengyuan & Huang, Lu, 2024. "How to drive sustainable economic development: The role of fintech, natural resources, and social vulnerability," Resources Policy, Elsevier, vol. 94(C).
    2. Guo, Dong & Li, Lin & Pang, Guoguang, 2024. "How does digital inclusive finance affect county's common prosperity: Theoretical and empirical evidence from China," Economic Analysis and Policy, Elsevier, vol. 82(C), pages 340-358.
    3. Dong, Hao & Zheng, Yingrong & Tang, Yuhong, 2024. "Impact of FinTech on the industrial structural transformation: Evidence from China's resource-based cities," Resources Policy, Elsevier, vol. 91(C).
    4. Rehman, Mubeen Abdur, 2024. "How has FinTech become a solution for minerals management?," Resources Policy, Elsevier, vol. 92(C).

    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. Rehman, Mubeen Abdur, 2024. "How has FinTech become a solution for minerals management?," Resources Policy, Elsevier, vol. 92(C).
    2. Chunhua Xin & Shuangshuang Fan & Zihao Guo, 2024. "Can digital finance promote inclusive growth to meet sustainable development in China? A machine learning approach," Environment, Development and Sustainability: A Multidisciplinary Approach to the Theory and Practice of Sustainable Development, Springer, vol. 26(10), pages 26647-26677, October.
    3. Zhao, Congyu & Jia, Rongwen & Dong, Kangyin, 2023. "Does financial inclusion achieve the dual dividends of narrowing carbon inequality within cities and between cities? Empirical evidence from China," Technological Forecasting and Social Change, Elsevier, vol. 195(C).
    4. Suhrab, Muhammad & Chen, Pinglu & Ullah, Atta, 2024. "Digital financial inclusion and income inequality nexus: Can technology innovation and infrastructure development help in achieving sustainable development goals?," Technology in Society, Elsevier, vol. 76(C).
    5. Lin, Boqiang & Huang, Chenchen, 2023. "How will promoting the digital economy affect electricity intensity?," Energy Policy, Elsevier, vol. 173(C).
    6. Ren, Jianyu & Xu, Zhitao & Hu, Mingzhi, 2023. "Digital economy and settlement intention of migrants in urban China," Telecommunications Policy, Elsevier, vol. 47(10).
    7. Li, Xitong & He, Peiming & Liao, Honglin & Liu, Jindan & Chen, Litai, 2024. "Does network infrastructure construction reduce urban–rural income inequality? Based on the “Broadband China” policy," Technological Forecasting and Social Change, Elsevier, vol. 205(C).
    8. Rui Zhou, 2022. "Measurement and Spatial-Temporal Characteristics of Inclusive Green Growth in China," Land, MDPI, vol. 11(8), pages 1-36, July.
    9. Yang, Tongbin & Zhou, Bo, 2024. "Local FinTech development, industrial structure, and north-south economic disparity in China," International Review of Financial Analysis, Elsevier, vol. 93(C).
    10. Li, Guoxiang & Wu, Haoyue & Jiang, Jieshu & Zong, Qingqing, 2023. "Digital finance and the low-carbon energy transition (LCET) from the perspective of capital-biased technical progress," Energy Economics, Elsevier, vol. 120(C).
    11. Luo, Haotian & Hu, Qing, 2024. "A re-examination of the influence of human capital on urban-rural income gap in China: College enrollment expansion, digital economy and spatial spillover," Economic Analysis and Policy, Elsevier, vol. 81(C), pages 494-519.
    12. R. V. Naveenan & Chee Yoong Liew & Ploypailin Kijkasiwat, 2024. "Nexus Between Financial Inclusion, Digital Inclusion and Health Outcomes: Evidence from Developing Economies," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 174(1), pages 367-408, August.
    13. Liu, Zhuang & Li, Xingyi, 2024. "The impact of bank fintech on ESG greenwashing," Finance Research Letters, Elsevier, vol. 62(PB).
    14. Sadiq, Muhammad & Paramaiah, Ch & joseph, Robinson & Dong, Ziguang & Nawaz, Muhammad Atif & Shukurullaevich, Nizomjon Khajimuratov, 2024. "Role of fintech, green finance, and natural resource rents in sustainable climate change in China. Mediating role of environmental regulations and government interventions in the pre-post COVID eras," Resources Policy, Elsevier, vol. 88(C).
    15. Zakaria Elouaourti & Aomar Ibourk, 2024. "Unveiling the drivers of Africa's digital financial inclusion journey," African Development Review, African Development Bank, vol. 36(1), pages 84-96, March.
    16. Yi Peng, 2015. "Regional earthquake vulnerability assessment using a combination of MCDM methods," Annals of Operations Research, Springer, vol. 234(1), pages 95-110, November.
    17. Zheng, Guozhong & Wang, Xiao, 2020. "The comprehensive evaluation of renewable energy system schemes in tourist resorts based on VIKOR method," Energy, Elsevier, vol. 193(C).
    18. Milad Zamanifar & Seyed Mohammad Seyedhoseyni, 2017. "Recovery planning model for roadways network after natural hazards," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 87(2), pages 699-716, June.
    19. Pedro Ponce & Citlaly Pérez & Aminah Robinson Fayek & Arturo Molina, 2022. "Solar Energy Implementation in Manufacturing Industry Using Multi-Criteria Decision-Making Fuzzy TOPSIS and S4 Framework," Energies, MDPI, vol. 15(23), pages 1-19, November.
    20. Jin, Laiqun & Dai, Jiaying & Jiang, Weijie & Cao, Kairui, 2023. "Digital finance and misallocation of resources among firms: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 66(C).

    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:streco:v:67:y:2023:i:c:p:439-458. 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/inca/525148 .

    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.