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Nonlinear Influence of Financial Technology on Regional Innovation Capability: Based on the Threshold Effect Analysis of Human Capital

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  • Wei Han

    (School of Humanities and Law, Henan Agricultural University, Zhengzhou 450046, China
    School of Accountancy, Zhengzhou Business University, Gongyi 451200, China
    School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China)

  • Ping Wang

    (School of Economics and Management, Weifang University of Science and Technology, Weifang 262700, China)

  • Yushi Jiang

    (School of Economics and Management, Southwest Jiaotong University, Chengdu 610031, China)

  • Hao Han

    (School of Foreign Languages, Zhengzhou Business University, Gongyi 451200, China)

Abstract

According to the data of financial technology and high-tech innovation level of 17 cities in the pilot area of China Independent Innovation Demonstration Zone (Shandong Province) from 2007 to 2017, and taking human capital as the threshold variable, this paper empirically analyzes the nonlinear influence of financial technology development on regional innovation capability under different absorptive capacity by constructing a panel threshold regression model. The results show that: (1) Taking human capital endowment as the threshold variable, the influence mechanism of financial technology development on regional innovation capability has an inverted S-shaped double threshold effect, that is, the driving effect of financial technology development on regional innovation capability has the “optimal range” of human capital absorption capability; (2) When the endowment of human capital is less than the first threshold, there is a significant negative relationship between financial technology and regional innovation capability, and in this case, financial technology development cannot promote the improvement of regional innovation capability; (3) When the human capital endowment crosses the first threshold, there is a significant positive relationship between the development of financial science and technology and the regional innovation capability, which indicates that only when the human capital endowment can better realize R&D learning, digestion and absorption can the development of financial science and technology achieve collaborative innovation and enhance the regional innovation capability; (4) After the endowment of human capital crosses the second threshold, although there is still a positive relationship between the development of financial technology and regional innovation capability, the driving effect of financial technology has a diminishing marginal effect, which shows that the scale of technology and finance should match with human capital, and unlimited expansion of human capital investment will also lead to the imbalance of the allocation of innovation elements and reduce the efficiency of regional innovation. Based on the empirical analysis results, the paper finally puts forward policy suggestions from the aspects of differentiated development strategy, innovative talent incentive policy, and the construction of financial technology leading center.

Suggested Citation

  • Wei Han & Ping Wang & Yushi Jiang & Hao Han, 2022. "Nonlinear Influence of Financial Technology on Regional Innovation Capability: Based on the Threshold Effect Analysis of Human Capital," Sustainability, MDPI, vol. 14(2), pages 1-16, January.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:2:p:1007-:d:726514
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    1. George, Gerard & Prabhu, Ganesh N., 2003. "Developmental financial institutions as technology policy instruments: implications for innovation and entrepreneurship in emerging economies," Research Policy, Elsevier, vol. 32(1), pages 89-108, January.
    2. David Audretsch & Erik Lehmann & Stefano Paleari & Silvio Vismara, 2016. "Entrepreneurial finance and technology transfer," The Journal of Technology Transfer, Springer, vol. 41(1), pages 1-9, February.
    3. Lee, In & Shin, Yong Jae, 2018. "Fintech: Ecosystem, business models, investment decisions, and challenges," Business Horizons, Elsevier, vol. 61(1), pages 35-46.
    4. Thomas Hall, 2015. "Firm Boundaries and Innovation: Empirical Evidence from Entrepreneurial Finance," International Journal of Innovation and Technology Management (IJITM), World Scientific Publishing Co. Pte. Ltd., vol. 12(05), pages 1-33.
    5. Senyo, PK & Osabutey, Ellis L.C., 2020. "Unearthing antecedents to financial inclusion through FinTech innovations," Technovation, Elsevier, vol. 98(C).
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    2. Shuo Zhao & Yang Zhao, 2023. "Corporate Sustainable Development from the Perspective of the Effect of Institutional Investors’ Shareholding on Earnings Management," Sustainability, MDPI, vol. 15(2), pages 1-13, January.

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