Can the synergy between FinTech and data element market development enhance credit allocation efficiency?

Shan Wu, Xiaoya Pan and Fan Wang

International Review of Economics & Finance, 2025, vol. 103, issue C

Abstract: Enhancing credit allocation efficiency constitutes a fundamental goal of financial system development. In the digital economy era, financial technology (FinTech) and data element markets have emerged as pivotal drivers of development. Employing a panel dataset of China's A-share listed firms traded on the Shanghai and Shenzhen exchanges from 2011 to 2021, this study systematically examines the effects and underlying mechanisms of the synergy between FinTech and data element market development on credit allocation efficiency. Results indicate that the synergy between FinTech and data element market development can significantly enhance credit allocation efficiency, with mechanism analysis revealing that this effect occurs by mitigating information asymmetry between banks and enterprises, reducing banks' reliance on collateral in credit lending, and intensifying competition within the banking sector. Heterogeneity analysis reveals that this synergistic effect has a more pronounced impact on enhancing credit allocation efficiency in samples of non-state-owned enterprises, eastern regions, regions with stronger intellectual property protection, and regions with more advanced digital infrastructure. These findings provide policymakers with valuable insights to harness the collaborative potential of FinTech and data market development to promote the efficient allocation of credit resources.

Keywords: FinTech; Data element market development; Credit allocation efficiency; Synergistic empowerment (search for similar items in EconPapers)
JEL-codes: D61 G21 G23 O33 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:reveco:v:103:y:2025:i:c:s1059056025006781

DOI: 10.1016/j.iref.2025.104515

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