Fintech, financial constraints, and corporate performance: evidence from China

Different from existing literature, we empirically analyse the non-linear relationship between fintech and the performance of Chinese listed enterprises from 2011 to 2022. We discover a significant inverted U-shaped relationship between fintech and corporate performance, especially for small-scale, young, and private enterprises. We overcome the endogeneity problem through the instrumental variable approach. A series of tests confirm the robustness of our results. Fintech mainly affects corporate performance by influencing financial constraints. Our research results provide new insights into improving corporate performance under the digital background, and suggest that enterprises should be vigilant about the possible risks brought by fintech.