Does FinTech Promote the Profitability of Real Enterprises in China?

Abstract

The innovative development of fintech has optimized the function of financial services and resource allocation, thus consolidating and strengthening the foundation of the real economy. Based on the data set of Chinese A-share listed companies from 2011 to 2018, this paper uses a fixed-effect model to test the impact of fintech on the profitability of real enterprises. The mechanism of fintech's influence on the profitability of real enterprises is discovered using the intermediary effect model; that is, by reducing the information asymmetry between financial institutions and enterprises, alleviating the financing constraints of enterprises, and thus promoting the growth of actual enterprise profitability. After employing robustness analyses such as adding control factors and modifying proxy variables, the conclusion holds up, demonstrating that the fintech promotion effect on enterprise profitability can be steady.