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How does FinTech affect the development of the digital economy? Evidence from China

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  • Chen, Xiaohui
  • Teng, Lei
  • Chen, Wen

Abstract

Financial Technology (FinTech) is key to the global ascendency of China's finance, and the digital economy is a new driving force in the sustainable development and high-quality growth of China's economy. So, what is the nature of the relationship between FinTech and the digital economy. Based on the CRITIC method, this study calculates the China's 31 provinces’ (excluding Hong Kong, Macao and Taiwan) FinTech indices from 2008 to 2018 and the digital economy development indices from 2012 to 2018, and analyzes the impact of FinTech on the digital economy and its underlying mechanism. The results show that FinTech stimulates the development of the digital economy in China by promoting technological innovation and weakening the financial decentralization of local governments. Further research indicates that local financial regulatory resources have a positive moderating effect on the impact of FinTech in promoting the development of the digital economy. Increased local financial regulatory resources will enable FinTech to promote the development of the digital economy, but this regulatory role is only significant in financially developed areas. The approach of the study is relatively novel.

Suggested Citation

  • Chen, Xiaohui & Teng, Lei & Chen, Wen, 2022. "How does FinTech affect the development of the digital economy? Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 61(C).
    • Handle: RePEc:eee:ecofin:v:61:y:2022:i:c:s1062940822000511
    DOI: 10.1016/j.najef.2022.101697
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    References listed on IDEAS

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    12. Ozili, Peterson K, 2023. "Benefits of digital-only financial inclusion," MPRA Paper 118796, University Library of Munich, Germany.
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    More about this item

    Keywords

    FinTech; Digital economy; Influence mechanism;
    All these keywords.

    JEL classification:

    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • E00 - Macroeconomics and Monetary Economics - - General - - - General
    • G00 - Financial Economics - - General - - - General

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