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How does financial development environment affect regional innovation capabilities? New perspectives from digital finance and institutional quality

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  • Feiling Lu

    (College of Letters & Science-Economics Dept, University of Wisconsin-Madison, Madison, USA)

Abstract

Based on China's 30 provincial panel data from 2006 to 2018, this paper uses the spatial Durbin model to empirically study the influence path and transmission mechanism of financial development on regional technological innovation, and introduce digital finance environment, marketization degree, and government environmental management as an adjustment variable to verify its regulating effect on financial development and regional technological innovation. The study found that the overall promotion of digital finance to local technological innovation is not significant. Besides, the characteristics of ownership discrimination and weak risk appetite in the bank's medium and long-term credit market have led to its failure to promote regional technological innovation. In contrast, the stock market and bond market in direct financing channels have enhanced local innovation capabilities. When the external environmental system is used as the adjustment variable, the results show that an excellent digital finance development, marketization degree, and government environmental management can effectively and positively regulate the effect of financial development and technological innovation.

Suggested Citation

  • Feiling Lu, 2023. "How does financial development environment affect regional innovation capabilities? New perspectives from digital finance and institutional quality," Journal of Information Economics, Anser Press, vol. 1(1), pages 31-46, January.
    • Handle: RePEc:bba:j00008:v:1:y:2023:i:1:p:31-46:d:83
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    References listed on IDEAS

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    Cited by:

    1. Huang, Xiaojing & Ma, Lei & Li, Rao & Mo, Yanke, 2025. "Digital finance development, intellectual property protection, and regional innovation," Finance Research Letters, Elsevier, vol. 86(PB).
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    3. Xiaowei Song & Jun Yang, 2024. "Assessing the impact of digitization and servitization of manufacturing firms in the context of carbon emission reduction: Evidence from a microsurvey in China," Energy & Environment, , vol. 35(7), pages 3340-3385, November.
    4. Chen, Zhengqi & Li, Fang, 2025. "Financial geography, business environment, and regional innovation level," Finance Research Letters, Elsevier, vol. 86(PG).
    5. Raihan, Asif, 2023. "Economy-energy-environment nexus: The role of information and communication technology towards green development in Malaysia," Innovation and Green Development, Elsevier, vol. 2(4).

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