The Impact of Financial Technology on Consumer Finance: Mechanisms and Empirical Evidence from China (Academic journal of management and social sciences)
Summary
- The study evaluates panel data from 31 provincial regions in China from 2011 to 2023, comprising a sample of 403 province-year observations.p.3
- The self-constructed provincial FinTech index averages 0.182 across the sample, with a minimum of 0.002 and a maximum of 0.810.p.4
- Outstanding personal consumption loans average 0.934 across provinces, ranging from a minimum of 0.004 to a maximum of 7.715.p.4
- Baseline regressions show that a 1 unit increase in FinTech development expands consumer finance by 4.957~6.105 units.p.5
- Instrumental variable estimation using a one-period lagged FinTech index confirms a positive effect with a coefficient of 7.052.p.5
- Regional heterogeneity analysis shows the strongest FinTech impact in eastern China with a coefficient of 5.014, compared to 3.346 in central and 2.930 in western regions.p.7
- Grouping by financial development shows the largest marginal effect in regions with lower financial development, where the FinTech coefficient is 5.831.p.7
Key insights
- FinTech significantly promotes the expansion of consumer finance across Chinese provinces.p.1
- The regional FinTech index is constructed using Baidu Search Index data across 25 keyword terms spanning four core dimensions.p.3
- Each 1 unit increase in FinTech development corresponds to an increase of 4.957~6.105 units in consumer finance.p.5
- A two-stage least squares model addressing reverse causality yields a second-stage FinTech coefficient of 7.052.p.5
- Excluding the 2020-2022 pandemic period confirms result stability, yielding a FinTech coefficient of 4.127.p.6
- FinTech drives consumer finance partly by increasing residents' disposable income, with a statistically significant coefficient of 0.399.p.6
- The positive effect of FinTech on consumer finance is largest in eastern China with an estimated coefficient of 5.014.p.7
- FinTech plays a stronger promotional role in regions with lower financial development, registering a coefficient of 5.831 compared to 2.082 in high-development areas.p.7
Topics and entities
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