How does digital finance affect regional innovation capacity? A spatial econometric analysis

Peng Hui, Hui Zhao, Desheng Liu and Ye Li

Economic Modelling, 2023, vol. 122, issue C

Abstract: Digital finance is a new model of financial services that impacts social development; however, there is a lack of adequate theoretical explanation of how digital finance affects regional innovation. Using the panel data for 31 provinces in China from 2011 to 2018, this paper investigates the impact of digital finance on regional innovation Capacity. We find that digital finance can enhance regional capacity. Further analysis indicates that the positive impact of digital finance on regional innovation capacity is stronger for provinces with a higher tertiary sector share of total GDP and a lower degree of market development. Digital finance still has a significant effect on regional innovation capacity in the case of introducing the spatial role of innovation capacity of neighboring provinces. These findings have implications for further exploring the use of digital finance to enhance regional innovation capacity in a differentiated market or geographical context.

Keywords: Digital finance; Regional innovation capacity; Spatial spillover; Industry structure; The degree of market development (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (14)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecmode:v:122:y:2023:i:c:s0264999323000627

DOI: 10.1016/j.econmod.2023.106250

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