Regional FinTech development and total factor productivity among firms: Evidence from China

Yunzhong Li, Chengfang Ye, Mingxi Li, Wai Yan Shum and Fujun Lai

The North American Journal of Economics and Finance, 2025, vol. 75, issue PA

Abstract: FinTech has been extensively applied in China in the context of high-quality development. This study quantifies the level of FinTech development in various Chinese cities based on the number of FinTech companies present, investigating the impact and mechanisms of regional FinTech development on enterprises’ Total Factor Productivity (TFP). The results indicate that FinTech significantly enhances enterprises’ TFP. This conclusion remains valid after a series of robustness tests. Mechanism analysis reveals that FinTech contributes to this improvement by enhancing credit availability of enterprises, increasing financing accessibility for businesses, reducing financing costs, alleviating financing constraints, and fostering technological innovation within enterprises. Heterogeneity analysis shows that this positive effect is more pronounced in highly competitive firms, non-financial background firms and regions with more favorable business environments. Overall, our findings demonstrate a positive impact of FinTech on enterprises’ TFP, providing new insights into its beneficial effects.

Keywords: FinTech; Total factor productivity; Credit availability; Innovation (search for similar items in EconPapers)
JEL-codes: D24 G32 G38 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:75:y:2025:i:pa:s1062940824002298

DOI: 10.1016/j.najef.2024.102304

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