The Impact Of Fintech On China’s Industrial Growth

As a technology-driven financial innovation,fintech can effectively reduce information asymmetry and improve the efficiency of financial resource allocation.Industrial growth is crucial to China’s economic development.As the industrial growth rate is slowing down and the economic development is facing the pressure of demand contraction,supply shock and expectation weakening,the impact of fintech on China’s industrial growth is worth studying.This paper constructs fintech indicators based on the number of Baidu news searching results of fintech related keywords,uses fintech data from 201 1 to 2019 from 287 cities in China,and industrial growth data in the next period,and utilizes two-way fixed effects regression models to study the impact of fintech on China’s industrial growth.At the same time,this paper builds instrumental variables by manually sorting out the fintech development level of adjacent cities,and constructs a difference-indifference model according to the policy impact of The Inclusive Finance Development Plan(2016-2020),so as to solve the endogenous problem.In addition,by replacing the measurement indicators of fintech with the Peking University Digital Financial Inclusion Index and the index constructed by principal component analysis method,changing the measurement indicators of industrial growth,retaining only prefecture level cities,adding or reducing control variables,and shortening the sample interval,this paper tested the robustness of the research conclusion.In addition,this paper uses the intermediary effect model to analyze the mechanism through which fintech promotes industrial growth.Besides,this paper analyzes the heterogeneity of the conclusions based on the subsamples of geographical location and urban strength.The results show that fintech significantly promotes industrial growth;Fintech can significantly promote industrial growth by increasing credit funds allocation;The effect of fintech in promoting industrial growth is more significant in the central and western regions;The effect of fintech in promoting industrial growth is more significant in regions with weaker strength.The conclusions are still valid after solving the endogenous problem and carrying out the robustness test.It can be seen that fintech can effectively promote China’s industrial growth and enable finance to support the real economy,which is of great importance to deepen the financial supply side structural reform and enhance the financial support to the real economy.