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How does financial regulation drive financial technology innovation? The role of government subsidies and financing constraints

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  • Hang, Chengshan
  • Yan, Jingdong
  • Yan, Wensheng

Abstract

Facing the numerous risks brought about by financial technology innovation, implementing scientific and effective financial regulation is a necessary means to maintain the stability of the national financial system and enhance the efficiency of the application of financial technology innovation. Based on the listed companies in the financial industry of Shanghai and Shenzhen A-share markets from 2012 to 2023, this paper uses the benchmark regression model, panel threshold regression model, and mediating effect model to empirically test the driving effect and mechanism of financial regulation on financial technology innovation. The research finds that the positive impact of financial regulation on financial technology innovation has a threshold effect., and government subsidies and financing constraints have mediating effects between the two. This study provides a useful reference for improving China's financial regulation model and enhancing the level of financial technology innovation.

Suggested Citation

  • Hang, Chengshan & Yan, Jingdong & Yan, Wensheng, 2026. "How does financial regulation drive financial technology innovation? The role of government subsidies and financing constraints," Finance Research Letters, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finlet:v:92:y:2026:i:c:s154461232600111x
    DOI: 10.1016/j.frl.2026.109580
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