The Development of Fintech and SME Innovation: Empirical Evidence from China

Hongyu Li, Zhiqiang Lu () and Qili Yin
Additional contact information
Hongyu Li: Business School, Ningbo University, Ningbo 315211, China
Zhiqiang Lu: Business School, Ningbo University, Ningbo 315211, China
Qili Yin: Audit Department, Liaoning Technical University, Fuxin 123008, China

Sustainability, 2023, vol. 15, issue 3, 1-14

Abstract: Innovation is the source of competitiveness among firms and the driver of economic growth. This paper examines the influence of fintech and firms’ innovation from the perspective of stakeholder financial support. To test the relationship, we collect data from Chinese small and medium-sized enterprises (SMEs) between 2011 and 2017. The results indicate that there is a strong positive effect of fintech development on firms’ innovative activities. This effect operates through fintech’s role in reducing information asymmetry: it increases the availability of funding support from stakeholders for firm R&D investment. Further, the funding supports are not only from investors and banks, but also from other stakeholders. In addition, this effect is larger for bigger and more opaque firms. These findings connect fintech with firm innovation and illuminate the unique roles and mechanisms of fintech development in promoting innovation inputs and outcomes.

Keywords: fintech; innovation; R& D investment; information asymmetry; stakeholders (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2023
References: Add references at CitEc
Citations: View citations in EconPapers (4)

Downloads: (external link)
https://www.mdpi.com/2071-1050/15/3/2541/pdf (application/pdf)
https://www.mdpi.com/2071-1050/15/3/2541/ (text/html)

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:gam:jsusta:v:15:y:2023:i:3:p:2541-:d:1052614

Access Statistics for this article

Sustainability is currently edited by Ms. Alexandra Wu

More articles in Sustainability from MDPI
Bibliographic data for series maintained by MDPI Indexing Manager ().