Fertilizing the soil: FinTech development and corporate digital transformation

Abstract

The FinTech development is expected to provide fertile soil for corporate digital transformation. Using the corporate digital transformation index creatively constructed in this paper, we verify that the development of regional financial technology can significantly promote corporate digital transformation, including digital technology and digital application. We find that the mechanisms mainly include easing financing constraints, improving the number and proportion of high-tech talents, and promoting enterprises to carry out more R&D activities. Further analysis shows that, the positive effect is more pronounced in private enterprises with better performance and lower capital expenditure. Our results provide evidence for the relationship between the financial sector and digital transformation.