Relationship between financial development and intelligent transformation of manufacturing: evidence from 69 countries

Tianjian Yang, Minghui Han, Yilin Zhong, Junhao Zhong () and Qinghua Zhang
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Tianjian Yang: South China University of Technology
Minghui Han: South China University of Technology
Yilin Zhong: South China University of Technology
Junhao Zhong: South China University of Technology
Qinghua Zhang: Guangzhou Huashang College

Economic Change and Restructuring, 2023, vol. 56, issue 5, No 23, 3437-3474

Abstract: Abstract Intelligent transformation is a typical feature of Industry 4.0. To investigate the causal relationship between financial development and intelligent transformation, we empirically investigate the relationship between the samples using panel data from 69 countries from 1993 to 2020, and address potential endogeneity using 2SLS regression. The results show that financial development has significant, positive, and heterogeneous effects on the intelligent transformation of manufacturing. The contributions of financial development are more pronounced in non-advanced, low levels of manufacturing technology, high manufacturing dependence, and bank-dominated economies. Finally, financial development promotes transformation through three channels: innovation, investment, and knowledge spillover effects. The findings would not only contribute to the related literature but also enable policymakers to better understand the value of financial development to the intelligent transformation of industries, especially for developing economies and economies with a high dependence on manufacturing.

Keywords: Intelligent transformation; Manufacturing industry; Financial development; Mechanism (search for similar items in EconPapers)
JEL-codes: G20 O14 O33 O56 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1007/s10644-023-09544-2

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