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A study on the mechanism of Fintech to improve the resilience of China's capital market

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  • Zeng, Dingsheng
  • Zhou, Jie
  • Wang, Lei

Abstract

This study examines the impact of Fintech development on capital market resilience in China by decomposing Fintech into three dimensions: breadth of coverage, degree of digitization, and depth of use. Using a TVP-VAR model and subgroup regressions across five major submarkets—bonds, funds, standard stock market, ChiNext, and large-cap stocks market—the analysis demonstrates that Fintech exerts heterogeneous effects on market resilience. Digitization consistently enhances market absorptive capacity, particularly within the ChiNext segment, by improving information transparency, liquidity, and innovation support. In contrast, excessive breadth of coverage and depth of use are associated with reduced resilience in several market segments, partly due to information overload and amplified volatility. While a nonlinear pattern between Fintech development and resilience is observed, the results suggest that balanced Fintech advancement is crucial to maximizing its positive effects. These findings refine theoretical models of financial innovation by emphasizing the differentiated roles of Fintech dimensions and submarket structures, offering practical insights for policymakers aiming to promote sustainable digital finance development while managing systemic risks.

Suggested Citation

  • Zeng, Dingsheng & Zhou, Jie & Wang, Lei, 2026. "A study on the mechanism of Fintech to improve the resilience of China's capital market," Research in International Business and Finance, Elsevier, vol. 87(C).
    • Handle: RePEc:eee:riibaf:v:87:y:2026:i:c:s0275531926001157
    DOI: 10.1016/j.ribaf.2026.103388
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