Fintech and MSEs Innovation: an Empirical Analysis

Siyu Chen and Qing Guo

Papers from arXiv.org

Abstract: Employing a comprehensive survey of micro and small enterprises (MSEs) and the Digital Financial Inclusion Index in China, this study investigates the influence of fintech on MSE innovation empirically. Our findings indicate that fintech advancement substantially enhances the likelihood of MSEs engaging in innovative endeavors and boosts both the investment and outcomes of their innovation processes. The underlying mechanisms are attributed to fintech's role in fostering long-term strategic incentives and investment in human capital. This includes the use of promotions and stock options as rewards, rather than traditional perks like gifts or trips, the attraction of a greater number of university graduates, and the increase in both training expenses and the remuneration of technical staff. Our heterogeneity analysis reveals that fintech exerts a more pronounced effect on MSEs situated in economically developed areas, those that are five years old or younger, and businesses with limited assets and workforce. Additionally, we uncover that fintech stimulates the innovation of MSEs' independent research and development (R\&D) efforts. This paper contributes to the understanding of the nuanced ways in which fintech impacts MSE innovation and offers policy insights aimed at unleashing the full potential of MSEs' innovative capabilities.

Date: 2024-07
New Economics Papers: this item is included in nep-cse, nep-fdg, nep-fle, nep-pay and nep-sbm
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://arxiv.org/pdf/2407.17293 Latest version (application/pdf)

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:arx:papers:2407.17293

Access Statistics for this paper

More papers in Papers from arXiv.org
Bibliographic data for series maintained by arXiv administrators ().