Can banking concentration improve regional FinTech development?

Chengzhi Qiao

International Review of Financial Analysis, 2025, vol. 99, issue C

Abstract: Rising competition, expanding service goals, and integrating business channels and banks through innovative digital technologies all contribute to regional FinTech development in the banking sector. This study uses the two-way fixed effects approach and prefectural-level data from 2011 to 2020 to examine the relationship between banking concentration and regional FinTech development. Findings reveal that higher concentration in the banking industry can promote the development of regional FinTech and show an inverted U-shaped connection, implying that reasonable competition in banking produces more positive results. Furthermore, the benefits come from improving the industry's structure and fostering technological innovation. Moreover, the effects of mediation vary from legal governance to urban market development (hereafter marketization). Specifically, more marketized cities show a more favorable market environment when examining the variations in degrees of marketization. Furthermore, the reduction in banking concentration has a significant positive impact on these cities. Conversely, communities with a low degree of marketization show a slower rate of development and a lower ability to adapt to changes in banking concentration. The heterogeneity test in the rule of law environment reveals that cities with a high rule of law environment have more market order than those with a low rule of law environment. Furthermore, a decline in banking concentration is likely to significantly influence FinTech.

Keywords: Banking concentration; Regional FinTech; Industry structure optimization; Technology innovation stimulation (search for similar items in EconPapers)
Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S1057521925000237
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:finana:v:99:y:2025:i:c:s1057521925000237

DOI: 10.1016/j.irfa.2025.103936

Access Statistics for this article

International Review of Financial Analysis is currently edited by B.M. Lucey

More articles in International Review of Financial Analysis from Elsevier
Bibliographic data for series maintained by Catherine Liu ().