The nonlinear impact of FinTech on the real economic growth: evidence from China

ABSTRACT

Financial technology (FinTech) in promoting the real economy is a topic attracting much attention. This paper adopts a threshold regression model to solve the endogenous problem well and make up for the lack of empirical evidence of scientific models in existing research in this area. The empirical results show that FinTech has a significant promoting effect on real economic growth, manifested as a U-shaped relationship and double threshold effect. In the early stage of FinTech development, it will restrain economic growth. The continuous improvement will positively impact economic growth, and the result shows a law of marginal decline. Moreover, there are significant regional differences in the nonlinear characteristics. Our research has solid practical significance and contributes to the literature on the effects of FinTech on real economic growth.

KEYWORDS:

• Fintech
• real economy
• nonlinear relationship
• panel threshold model

JEL CODE:

• G10
• O30

Disclosure statement

No potential conflict of interest was reported by the author(s).

Additional information

Funding

This work was supported by: (1) the National Social Science Fund Projects of China: Research on Incentive Compatibility Mechanism and Policy of Fintech Innovation and Regulation (grant no 21BJY148); (2) Major Research Projects of Philosophy and Social Science in Universities in Jiangsu China: Research on the Optimization of the Regulatory Path of FinTech Innovations (grant no 2019SJZDA060).(3) The Postgraduate Research & Practice Innovation Program of Jiangsu Province: Research on the impact of digital economy on Regional Innovation Performance (grant no KYCX22_3725).