Effective regulations of FinTech innovations: the case of China

Ya Bu, Hui Li and Xiaoqing Wu

Economics of Innovation and New Technology, 2022, vol. 31, issue 8, 751-769

Abstract: In recent years, China has witnessed the rapid development of FinTech and become a leading country in the world. However, the regulatory mode under the traditional regulatory framework in China is difficult to effectively deal with the potential risks of FinTech innovations, which leads to frequent risk events. Firstly, based on the in-depth analysis of some research reports and regulatory policies, we clearly define the development status and essential characteristics of FinTech companies and regulatory authorities. Secondly, we construct a two-player evolutionary game model to depict the evolutionary game behavior between FinTech companies and regulatory authorities and analyze influencing factors of their strategic choices. We find that strategic choices of FinTech companies are mainly affected by extra benefits from non-compliance innovation, rewards from compliance innovation and penalty intensity from regulatory authorities, and strategic choices of regulatory authorities are mainly affected by regulatory costs, social evaluation and negative externalities. Finally, based on the realities of excessive innovations and insufficient regulations in China’s FinTech industry, we put forward some policy suggestions to promote the effective regulations of FinTech innovations and achieve a balance between regulation and innovation.

Date: 2022
References: Add references at CitEc
Citations: View citations in EconPapers (3)

Downloads: (external link)
http://hdl.handle.net/10.1080/10438599.2020.1868069 (text/html)
Access to full text is restricted to subscribers.

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:taf:ecinnt:v:31:y:2022:i:8:p:751-769

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/GEIN20

DOI: 10.1080/10438599.2020.1868069

Access Statistics for this article

Economics of Innovation and New Technology is currently edited by Professor Cristiano Antonelli

More articles in Economics of Innovation and New Technology from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().