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The effect of fintech financing on firm performance: Evidence from emerging economies

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  • Gaibulloev, Khusrav
  • Mirzaei, Ali
  • Moore, Tomoe
  • Saad, Mohsen

Abstract

This paper rigorously examines the relationship between fintech financing and the financial and real performance of financially constrained firms in emerging countries. Using data from 45,770 firms across 20 countries for 2012–2020, we find that the performance of external-finance dependent firms is disproportionately higher when they operate in countries that receive more fintech funds. A host of robustness tests confirm our main finding. We further find that: (i) P2P lending and crowdfunding have greater implications on firm performance than balance sheet lending (ii) the relationship is particularly strong in young firms, and financially developed emerging countries with deeper disclosure of credit information, and (iii) specifically, in countries with greater banking penetration, there is evidence of a substitution effect between bank lending and fintech. Additionally, fintech finance increases capital investment, lowers borrowing costs, and boosts total factor productivity (TFP) to improve firm performance.

Suggested Citation

  • Gaibulloev, Khusrav & Mirzaei, Ali & Moore, Tomoe & Saad, Mohsen, 2025. "The effect of fintech financing on firm performance: Evidence from emerging economies," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 103(C).
    • Handle: RePEc:eee:intfin:v:103:y:2025:i:c:s1042443125000915
    DOI: 10.1016/j.intfin.2025.102201
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