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FinTech matters in sustainable finance: Does it redistribute the supply of financial services?

Author

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  • Zhou, Bo
  • Wang, Qunwei

Abstract

FinTech brings new technology, and thus promises to improve financial services of sustainable finance to brown firms. We study the mixed impacts of FinTech and sustainable finance on China’s publicly listed firms. The regression results show that FinTech makes sustainable finance work, then brown firms obtain more bank credits with lower interest payable, and add expenditure in environmental protection. The mixed impact is more notable when brown firms face higher banking competition; it implies that in the field of sustainable finance, substitution between FinTech and banks is economically small. We find at least two technology shocks to brown firms, of applying FinTech in sustainable finance: (a) FinTech helps banks identify brown firms’ greenwashing behaviors, and thus reduces the supply of financial services to these firms. (b) FinTech helps brown firms with no bank connection obtain more supply of financial services. These findings rationalize the use of FinTech for effective sustainable finance, especially the use for redistributing the improper supply of financial services.

Suggested Citation

  • Zhou, Bo & Wang, Qunwei, 2024. "FinTech matters in sustainable finance: Does it redistribute the supply of financial services?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 91(C).
    • Handle: RePEc:eee:intfin:v:91:y:2024:i:c:s1042443123001816
    DOI: 10.1016/j.intfin.2023.101913
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