Open Access Journal Article

Impact of Digital Finance on Technological Innovation in China's High-Tech Zones

by Bingqing Wang a ,  Zhenji Chen a  and  Xuewei Sun a,*
a
Faculty of Finance, City University of Macau, Macao, China
*
Author to whom correspondence should be addressed.
REA  2024 3(2):33; https://doi.org/10.58567/rea03020005
Received: 21 May 2024 / Accepted: 10 August 2024 / Published Online: 9 January 2025
View Full-Text
Download PDF

Abstract

In this paper, we study the impact of digital finance on technological innovation in China's national high-tech development zones. We find that digital finance improves technological innovation in high-tech zones. Regarding digital financial coverage, usage, and support, the results still exist. Additional analysis suggests that when a high-tech zone faces severe financing constraints (in terms of higher local governmental debt and better development of credit markets), the impact of digital finance on technological innovation is more salient.

Keywords: Digital Finance; High-Tech Development Zones; Technological Innovation; Financing Constraints;
Copyright: © 2025 by Wang, Chen and Sun. This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY) (Creative Commons Attribution 4.0 International License). The use, distribution or reproduction in other forums is permitted, provided the original author(s) or licensor are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

Share and Cite

ACS Style
Wang, B.; Chen, Z.; Sun, X. Impact of Digital Finance on Technological Innovation in China's High-Tech Zones. Review of Economic Assessment, 2024, 3, 33. https://doi.org/10.58567/rea03020005
AMA Style
Wang B, Chen Z, Sun X. Impact of Digital Finance on Technological Innovation in China's High-Tech Zones. Review of Economic Assessment; 2024, 3(2):33. https://doi.org/10.58567/rea03020005
Chicago/Turabian Style
Wang, Bingqing; Chen, Zhenji; Sun, Xuewei 2024. "Impact of Digital Finance on Technological Innovation in China's High-Tech Zones" Review of Economic Assessment 3, no.2:33. https://doi.org/10.58567/rea03020005
APA style
Wang, B., Chen, Z., & Sun, X. (2024). Impact of Digital Finance on Technological Innovation in China's High-Tech Zones. Review of Economic Assessment, 3(2), 33. https://doi.org/10.58567/rea03020005

Article Metrics

Article Access Statistics

References

  1. Adler, P., Florida, R., King, K., and Mellander, C. (2019). The city and high-tech startups: The spatial organization of Schumpeterian entrepreneurship. Cities, 87, 121-130. https://doi.org/10.1016/j.cities.2018.12.013
  2. Aghion, P., Askenazy, P., Berman, N., Cette, G., and Eymard, L. (2012). Credit constraints and the cyclicality of R&D investment: Evidence from France. Journal of the European Economic Association, 10, 1001-1024. https://doi.org/10.1111/j.1542-4774.2012.01093.x
  3. Amore, M. D., Schneider, C., and Žaldokas, A. (2013). Credit supply and corporate innovation. Journal of Financial Economics, 109, 835-855. https://www.sciencedirect.com/science/article/abs/pii/S0304405X1300113X
  4. Berger, A. N., and Udell, G. F. (1990). Collateral, loan quality and bank risk. Journal of Monetary Economics, 25, 21-42. https://doi.org/10.1016/0304-3932(90)90042-3
  5. Demirgüç-Kunt, A., and Klapper, L. F. (2012). Measuring financial inclusion: The global findex database. World bank policy research working paper, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2043012
  6. Elisa, U., Annalisa, C., Armin, S., Massimo, C., and Alexander, B. (2021). Digital technologies and the changing entrepreneurial finance landscape: Status quo and perspectives for future research. Technological Forecasting and Social Change, 168, 120768. https://doi.org/10.1016/j.techfore.2021.120768
  7. Fernandez, V. (2021). The role of trust and social commitment in start-up financing. International Review of Financial Analysis, 75, 101722. https://doi.org/10.1016/j.irfa.2021.101722
  8. Hall, B.H., and Lerner, J. (2010). The financing of R&D and innovation. In Handbook of the Economics of Innovation 1, 609-639.
  9. Holmstrom, B. (1989). Agency costs and innovation. Journal of Economic Behavior & Organization, 12, 305-327.
  10. Hsu, P.-H., Tian, X., and Xu, Y. (2014). Financial development and innovation: Cross-country evidence. Journal of financial economics, 112, 116-135.
  11. Huang, Y., Pagano, M., and Panizza, U. (2020). Local crowding‐out in China. The Journal of Finance, 75, 2855-2898. https://doi.org/10.1111/jofi.12966
  12. Luo, Y., Peng, Y., and Zeng, L. (2021). Digital financial capability and entrepreneurial performance. International Review of Economics & Finance, 76, 55-74. https://doi.org/10.1016/j.iref.2021.05.010
  13. Nigam, N., Benetti, C., and Johan, S. A. (2020). Digital start-up access to venture capital financing: What signals quality? Emerging Markets Review, https://doi.org/10.1016/j.ememar.2020.100743
  14. Ozili, P. K., (2018). Impact of digital finance on financial inclusion and stability. Borsa Istanbul Review, 18, 329-340.
  15. Rossi, M., Festa, G., Devalle, A., and Mueller, J. (2020). When corporations get disruptive, the disruptive get corporate: Financing disruptive technologies through corporate venture capital. Journal of Business Research, 118, 378-388.
  16. Song, Q., Li, J., Wu, Y., and Yin, Z. (2020). Accessibility of financial services and household consumption in China: Evidence from micro data. The North American Journal of Economics and Finance, https://doi.org/10.1016/j.najef.2020.101213
  17. Stiglitz, J. E., and Weiss, A. (1981). Credit rationing in markets with imperfect information. The American economic review, 71, 393-410.
  18. Teles, V. K., and Mussolini, C. C. (2014). Public debt and the limits of fiscal policy to increase economic growth. European Economic Review, 66, 1-15. https://doi.org/10.1016/j.euroecorev.2013.11.003
  19. Trinugroho, I., Pamungkas, P., Wiwoho, J., Damayanti, S. M., and Pramono, T. (2021). Adoption of Digital Technologies for Micro and Small Business in Indonesia. Finance Research Letters, https://doi.org/10.1016/j.frl.2021.102156
  20. Wu, Y. (2014). Local government debt and economic growth in China, BOFIT Discussion Papers, https://papers.ssrn.com/sol3/papers.cfm?abstract_id=2537409
  21. Zhong, W., and Jiang, T. (2021). Can internet finance alleviate the exclusiveness of traditional finance? evidence from Chinese P2P lending markets. Finance Research Letters, https://doi.org/10.1016/j.frl.2020.101731