Information Asymmetry Research Articles

Does China’s social credit system construction promote foreign bank expansion?

Information asymmetry is one of the significant barriers to the development of multinational banks. This paper examines the impact of China’s social credit system construction in pilot cities and the privatization of credit reporting on the expansion of foreign banks. The findings indicate that the upgrading of China’s social credit system significantly promotes the expansion of foreign banks. Foreign banks establish more business branches in pilot cities and cities with higher levels of privatization in credit reporting systems. The mechanism lies in the fact that the development of the credit reporting system alleviates the information asymmetry for foreign banks. Further analysis reveals that this effect is particularly applicable to foreign banks from European and American markets, globally systemically important banks, cities with high financial development, and regional central cities. This study provides evidence from the perspective of credit reporting system reform to facilitate foreign bank expansion.

The social value of overreaction to information

We study the welfare effects of overreaction to information in markets with asymmetric information as well as the impact of a simple intervention in the form of a tax or a subsidy on trade volume. A large enough level of overreaction is always welfare decreasing: in these situations, introducing a tax can improve welfare. However, a small degree of overreaction can increase welfare. This is because of the interplay of two competing externalities: an information externality, due to the informational role of prices, and a pecuniary externality, due to the allocative role of prices. Depending on the balance of these externalities, a trade volume subsidy may be optimal.

Blockchain-based food traceability system and pro-environmental consumption: A moderated mediation model of technology anxiety and trust in organic food product

Blockchain technology is increasingly recognized as a transformative tool for enhancing clarity and responsibility in the organic food supply chain, where concerns about product authenticity and safety are paramount. By offering provable and translucent information about the origination, production processes, and administration of organic items, blockchain helps to reduce information asymmetry and builds consumer trust, which is critical for purchase decisions in the organic food market. Drawing on insights from the trust theory and the stimulus-organism-response framework, this study uses a moderated mediation model to explore how technology anxiety negatively moderates the direct and indirect influences of blockchain-based food traceability systems on trust in organic food products and organic food purchase intention. Using a targeted sample of 5326 consumers in Vietnam, the PROCESS macro approach (models 8 and 4) is utilized to examine the formulated hypotheses. The results demonstrate that blockchain-based food traceability systems notably enhance consumer trust in organic food products and their intention to buy these products. Trust in organic food products serves as a mediator in the connection between blockchain-based traceability and purchase intention, while technology anxiety weakens the positive impacts of blockchain technology on trust and purchase intention when anxiety levels are high. This research makes crucial contributions to the literature by offering a mechanism-based explanation of how blockchain technology enhances consumer trust in organic food products and integrates technological anxiety as a moderator, providing a deeper understanding of how technological innovations shape consumer behavior. In light of the findings, several critical recommendations have been proposed for practitioners and policymakers.

Bank-firm common ownership, green credit and enterprise green technology innovation: Evidence from Chinese credit markets

Bank-firm common ownership can tackle the innovation dilemma of bank loans on firms' green development. This paper constructs indicators of common ownership and green technological innovation and then investigates the impact of bank-firm common ownership on corporates' green technological innovation using Chinese A-share listed enterprises samples from 2004 to 2021. Our conducted experiments reveal that bank-firm common ownership shareholders not only make banks and lending firms have the same goal, promote the total level, quantity, and quality of technological innovation for the green development of lending firms, and profit from the firms' short- and long-term market responses. Our findings are prominent in private enterprises, small-capitalization enterprises, and bull market cycles. In addition, we discover that shareholder reduction restrictions and policies restricting corporate shareholding in financial institutions enhance bank-firm common ownership shareholders on corporate green technological innovation development. Common ownership shareholders reduce information asymmetry between banks and lending enterprises and provide green loans to support enterprise green technology innovations. Furthermore, alleviating financing constraints and strengthening the supervisory role are important influence mechanisms. In this regard, carried PSE analysis indicates the direct effect of bank-firm common ownership shareholders to promote enterprise green development of technological innovation accounts for about 14 % of the total effect, the intermediary effect of “financing mechanism” and “supervision mechanism” account for about 82 % and 4 %, and the “financing mechanism” is more important than the “supervision mechanism.” The findings of this paper can optimize the credit market to serve the green and high-quality development of Chinese enterprises better.

Debtholder Responses to Controlling Shareholders’ Share Pledging

This study investigates debtholders’ responses to controlling shareholders’ share pledging. We found that share pledging by controlling shareholders is crucial for reducing agency costs. This lessens the information asymmetry of outsiders by strengthening pledgee supervision, and decreases companies’ risk-taking by adopting a relatively conservative investment strategy that hedges excessive risks. This also reduces the impact of insider control, decreases the interest spread, and increases the length of loan maturity. Further analyses show that the favorable effect of share pledging on bank loan covenants weakens for companies with a higher degree of financing deficit. Additionally, the role of share pledging varies with the agency costs of companies’ insider controls. The effects of share pledging on bank loan terms are more profound for companies with a higher degree of corporate governance performance. Robustness analyses addressing potential endogeneity further confirm our primary conclusions.

The Digital Markets Act: A partial solution to antitrust’s remedy problem

Antitrust remedies in digital markets have shown little effectiveness. The Digital Markets Act (DMA) offers a partial solution by establishing a multi-level remedial pyramid that addresses several of the challenges the Commission faced when remedying antitrust infringements. At the base of this pyramid are the DMA’s obligations, which embed ex ante remedies that are faster and more prescriptive than antitrust remedies. The second level consists of regulatory dialogue, an open and iterative specification procedure that can mitigate information asymmetries and future-proof remedies. The third level is the non-compliance procedure, which complements the regulatory dialogue. At the pyramid’s apex is the systematic non-compliance procedure. It empowers the Commission to impose ex post remedies, which can be more forceful than their EU competition law counterparts. Although the DMA enhances the Commission’s remedial process and powers compared to EU competition law, it is crucial for the Commission to exercise its authority judiciously. The Commission’s focus should be on the intermediate layers of the remedial pyramid, particularly the regulatory dialogue.

Financial Services Accessibility And Financial Performance Of Small And Medium Enterprises In Kiambu County, Kenya

Despite their positive contribution, the operation of Small and Medium Enterprises has been confronted by various challenges such as loan repayment default, inadequate capital as well as the persistent regulations which negatively affects their performance leading to high failure rate of one for every five startups within three years. The SMEs in Kiambu County have similar challenges though operating in a densely populated County. Consequently, their performance is negatively affected. The study purposed to examine the influence of financial accessibility on success of SMEs in Kiambu County, Kenya. The research specifically identified the effect of access to credit, access to insurance and explore the influence of entrepreneurial training on financial performance of SMEs in Kiambu County, Kenya. The research was underpinned on Credit Access Theory, Asymmetric Information Theory and Bank Lending Channel Theory. Using a causal research design, this research study targeted a population of 2750 registered SMEs in Kiambu County. Stratified random sampling approach was employed where 10% (275) respondents participated in the study. Both descriptive analysis and multiple regression analysis were adopted in data analysis. Charts and tables were utilized to present research results. The study findings indicate that access to credit has a positive and significant effect on SMEs financial performance with a p- value 0.025 < 0.05. On access to business insurance, the study found that in case of damages, SMES that have insurance will have improved performance. This is shown by a p- value 0.000. < 0.05. Entrepreneurial training has a positive and significant effect on SMES performance in Kiambu County. The study nevertheless recommends for enhanced entrepreneurial training, insurance and more credit to improve performance

Labor investment efficiency: a review of the international literature

PurposeWe aim to provide a systematic literature review of the determinants and consequences of labor investment efficiency in an international context. First, we offer a theoretical discussion of labor investment efficiency, followed by an examination of its measurement. Next, we review the determinants of labor investment efficiency, categorizing them into firm fundamentals including financial reporting quality, governance and controls, corporate social responsibility/environmental regulation and macroeconomic determinants. Finally, we review the limited empirical literature on the consequences of labor investment efficiency. We also provide some suggestions for future research.Design/methodology/approachWe perform a systematic literature review using the Preferred Reporting Items for a Systematic Review of Meta-Analysis (PRISMA) guidelines to examine archival studies investigating the determinants and consequences of labor investment efficiency. Using a Boolean search strategy on the Scopus and PRISMA selection criteria, we review 86 published archival research articles from 2014 to the end of August 2024.FindingsOur review highlights that firm-level fundamental factors including financial reporting quality have profound implications for labor investment efficiency. Effective governance mechanisms also help mitigate agency conflicts and information asymmetries and alleviate labor investment inefficiencies. Furthermore, the influence of regulations including ESG-related regulations and macroeconomic factors play a crucial role in shaping labor investment decisions. We find very little research on the consequence of labor investment efficiency.Practical implicationsOur review has highlighted that well-functioning corporate governance tools are effective in mitigating inefficient labor investments. Stakeholders, therefore, should ensure that firms have effective internal governance mechanisms in place and that external governance regulations complement and where necessary act as substitutes for internal governance mechanisms to optimize labor investments.Originality/valueTo the best of our knowledge, this study represents the first systematic review of extant research on labor investment efficiency. Our review highlights some research gaps, particularly about the consequences of labor investment efficiency and offers some suggestions for future research.

Enhancing the Public-Private-Community Partnerships in the Banana Value Chain in Mutasa District, Zimbabwe

The paradigm shift from the New Public Administration to the New Public Governance underlines the significance of multi-stakeholder collaborations in attending to complex societal challenges. In this vein, Public-Private-Community Partnerships are a feasible mechanism for enhancing the banana value chain in Mutasa District of Zimbabwe. Bananas are extensively eaten fruits in the world with smallholder farmers playing a vital role in production, particularly in developing nations like Zimbabwe. Yet smallholder farmers’ economic returns in the banana value chain are a cause of concern. Thus, this study focuses on enhancing Public-Private-Community Partnerships in the smallholder banana value chain. A concurrent mixed methods research design allowed for both objectivity and detailed analysis. The target population comprised public, private, and community stakeholders in the banana value chain. The multiplicity of stakeholders motivated a mixture of quota, purposive, and snowball sampling techniques to ensure representation. Questionnaires, in-depth interviews, and focus group discussions were the data collection methods. There was descriptive analysis of quantitative data, while qualitative data were analyzed thematically, and related findings were grouped together. Public-Private-Community Partnerships are attractive because they reduce information asymmetry, enhance transparency, ensure fairness in pricing, facilitate risk sharing, increase productivity, and enhance value addition. Public-Private-Community Partnerships are not “magic bullets”, necessitating attention to their potential deficits, which include power imbalances, conflicts of interest among partners, and challenges associated with ensuring active participation by diverse stakeholder groups. Pathways for strengthening Public-Private-Community Partnerships include consensus building, clear definition of partners’ roles, fair sharing of risks and benefits, monitoring and evaluation, selection of competent actors, and farmer capacity building. Effective Public-Private-Community Partnerships facilitate active participation among the public, private, and community actors along the entire value chain.

Multi-Borrowing Practices and Loan Repayment of Micro and Small Enterprises in Trade Sector in Meru County, Kenya

In Kenya, the increase in multi-borrowing and its effects on loan repayment is a growing concern for microfinance institutions. The general purpose of this research was to establish the effect of multi-borrowing on loan repayment among MSEs in Meru County. Specifically, the study aimed to determine how the number of loans borrowed, interest payable, and the financial literacy of borrowers influenced loan repayment within Meru County Microfinance. The research was anchored on information asymmetry, prospect theory, moral hazard, and adverse selection theories. The study targeted 6,000 MSE owners who were members of Meru County Microfinance, from which a sample of 200 borrowers was selected. A descriptive research design was employed to assess how multiple borrowings affected loan repayment. Cluster and random sampling methods were used to identify respondents across the seven branches of Meru County Microfinance. Primary data was collected using questionnaires, and analyzed by use of descriptive, correlational, and regression analysis techniques. Inferential analysis was conducted at a 0.05 significance threshold, utilizing the Statistical Package for Social Sciences (SPSS) version 28 for data analysis. Ethical standards were strictly observed throughout the study. The study revealed that the number of loans borrowed had a significant impact on loan repayment among MSEs in Meru County. Effective management of borrowing was crucial for better repayment outcomes. Interest payable was identified as a critical factor affecting loan repayment; enterprises with well-managed credit risk practices, including the adjustment of interest rates and repayment schedules, exhibited better repayment performance. Furthermore, the level of financial literacy positively influenced loan repayment, with higher financial literacy levels leading to improved loan management and repayment behaviors. The study concluded that the number of loans borrowed significantly affected loan repayment, although its impact was less direct compared to other factors. Interest payable had the most substantial effect on loan repayment, with effective credit risk management correlating strongly with better repayment outcomes. Additionally, a higher level of financial literacy was found to significantly enhance loan repayment. Based on the findings, it is recommended that micro and small enterprises regularly review and manage their borrowing policies to improve loan repayment. Financial institutions should implement clear policies on irrecoverable loan provisions and adopt robust credit management practices to ensure better loan repayment. Moreover, enhancing financial literacy among borrowers is crucial for improving loan repayment, and thus, targeted financial education programs should be developed. Policymakers should also evaluate and update regulatory frameworks to support effective loan management and repayment practices within microfinance institutions.

Smart contracting for production supply in shared manufacturing: a practical simulation approach

Enhancing transparency in production processes, especially in shared manufacturing, relies heavily on sharing data. Information asymmetries and coordination problems between parties with conflicting interests pose a challenge in this multi-stakeholder interaction. Blockchain technology with smart contracting can be a solution due to its immutable data and decentralised data storage features. Designing and executing blockchain in industrial applications is a highly intricate task that requires extensive testing, expertise, and proficiency. This paper is the first to propose a holistic simulation model for evaluating the impact of smart contracting on shared manufacturing, including a novel approach to simulated smart contracting in time-lapse for Ethereum-based networks. The introduced model guides the design and implementation process of blockchain applications in shared manufacturing to address this challenge. A systematic literature review establishes ten design process requirements and ten smart contract functions. The implementation is developed based on the design benchmarks of three Ethereum-based frameworks to investigate the simulation model's respective feasibility and scalability. The simulation model validation demonstrates our approach's suitability for simulating smart contracting in shared manufacturing within a hybrid production. It enables fast and scalable simulations, offering an innovative approach to extensively testing blockchain applications before their introduction to ongoing industrial operations.

Exploring Patient, Proxy, and Clinician Perspectives on the Value and Impact of an Inpatient Portal: A Reflexive Thematic Analysis.

Research exploring perspectives on inpatient portals reports that patients desire the information affordances of inpatient portals, and clinicians recognize their value for improving patient experience but also express caution regarding sharing aspects of the medical record. This study contributed to theexisting literature on inpatient portals by considering the psychosocial dimension of clinician resistance to information sharing with inpatients and the power dynamic associated with clinician-patient information asymmetry. Along with the information affordances commonly discussed in this area, this study explored perspectives on the novel option to audio record consultations via an inpatient portal. This study aims to understand patient, proxy, and clinician perspectives on the value and impact of an inpatient portal within the Australian context. It explores clinician resistance and receptivity to sharing aspects of the medical record with patients and the power dynamic that characterizes the relationship between clinician and patient. It considers how an inpatient portal might assist in the transformation of this relationship such that this relationship could be characterized by greater information symmetry. Interviews were conducted with patients (n=20), proxies (n=4), and clinicians (n=21) recruited from 3 areas within the Royal Melbourne Hospital, where the portal would later be implemented. A largely inductive reflexive thematic analysis was conducted. Patient and proxy participants reported that they wanted to understand what is happening in their care for peace of mind and that an inpatient portal could support this understanding. Clinician participants reflected on how they might transform their information-sharing practice to provide greater transparency in their relationship with patients. Participants considered the types of information that could be shared and how this information could be shared via an inpatient portal. Four key themes were generated: (1) affording the patient and proxy awareness, control, and reassurance through sharing accessible and meaningful information; (2) protecting the clinician and safeguarding quality health care in information sharing; (3) flexibly deploying the functions depending upon clinician, patient, proxy, and context; and (4) moving toward person-centered care: empowerment and equity via an inpatient portal. An inpatient portal provides an opportunity to reconceptualize the medical record and how this information might be shared with patients while they are admitted to thehospital, such that they have more understanding as to what is happening in their care, which ultimately supports their well-being. The transition to a more transparent information-sharing culture in the Australian hospital context will take time. An inpatient portal is a critical step in facilitating this transition and creating more informational symmetry in the clinician-patient relationship.

Green Finance, Economic Policy Uncertainty, and Corporate ESG Performance

Given the increasing prevalence of global warming and the frequent occurrence of extreme weather events and other challenges, countries are increasingly recognizing the importance of green and sustainable development. This paper uses the multi-period double difference and PSM-DID method to test the impact of green finance policies on the ESG performance of Chinese listed companies. Research has shown that implementing pilot zone policies can improve corporate ESG performance, especially for enterprises with low business reputations, fierce industry competition, severe information asymmetry, and state-owned attributes. The GFPZ policy drives companies to improve their ESG performance through two paths: promoting environmental innovation and strengthening restrictions on corporate financing. In addition, the increase in economic policy uncertainty hinders the positive impact of GFPZ policies on improving corporate ESG performance. This study enriches the existing micro-research on green finance policies from the perspective of enterprises. It provides empirical evidence and research insights to support the further improvement of pilot zone policies, the promotion of green sustainable development, and the improvement of corporate ESG performance.

“Family Companies”—Editorial Synthesis of Special Issue

This paper presents an editorial synthesis of the three substantive papers published in this Special Issue. The lens for this synthesis concerns the joint contribution of the three papers in identifying potential bases for explaining variation in Type 2 agency costs of equity in family companies. The papers included in this Special Issue, using data from Portugal and Africa, suggest three bases. These bases are Small-to-Medium Enterprise status, prevalence of third parties to reduce information asymmetry between the principals and agents, and domicile in South Africa (for African family businesses). It follows from the paper using data from Jordan that degree of tax avoidance would be a suitable measure of Type 2 agency costs of equity. Hence, it would be appropriate for future research to investigate whether this metric varies systematically, across family companies, according to these three bases.

Digital communication competence and technology adoption: Drivers of performance among small-scale millennial farmers in Indonesia

Digital development in rural areas has become a driving force in increasing agricultural and rural economic productivity. However, the lack of digital communication competence among farmers remains a problem, causing market information asymmetry and an inability to effectively utilize information and communication technology (ICT) in the agricultural sector to increase business profits. Therefore, it is important to examine the use of ICT in the agricultural sector in 19- to 39-year-old age groups (or millennial farmers), as this generation is considered closest to digital technology. This study used a survey method with 345 millennial farmers in Bogor, Indonesia, and data were analyzed using partial least squares-structural equation modeling (PLS-SEM). The results of this study indicate that digital communication competence, as reflected by motivation, knowledge, and digital skills, plays a crucial role in enhancing the performance of millennial farmers both directly and indirectly through ICT utilization. Farmers possessing superior digital communication competencies exhibit a greater inclination to employ technology for communication, information acquisition, idea dissemination, and marketing in their agricultural pursuits, resulting in more informed decision making and potentially improved productivity and profitability. The results contribute to the understanding of the role of digital communication competence and ICT utilization in enhancing farmers’ performance.

Pretending Ignorance Is Bliss: Competing Insurers with Heterogeneous Informational Advantages

Abstract The availability of big data and analytics expertise provides insurers with informational advantages over policyholders in estimating risk. We study competition between heterogeneously informed insurers, showing that their information may or may not be revealed in equilibrium. We find that all equilibria are profitable and that noninformative equilibria entail risk pooling and possibly efficiency. In informative equilibria, the signaling problem interacts with the screening problem that arises endogenously from insurers' revelation of information, implying underinsurance. Our main insights are robust to changes in insurers' information precision and market concentration and to the presence of two-sided asymmetric information and withdrawable contracts. (JEL D43, D82, G22)

Do CSR practices affect perceived market performance through compliance status? Evidence from a quasi-natural experiment in India

PurposeThe study examines the impact of corporate social responsibility (CSR) non-compliance on firm value. It also investigates the moderating roles of ownership concentration and research and development (R&D) intensity in this relationship.Design/methodology/approachFor hypothesis testing, the authors utilized panel data regression models on a dataset comprising 13,760 firm-years listed on the Bombay Stock Exchange, covering a period of nine years following the legislation (from March 2015 to March 2023).FindingsOur findings reveal a detrimental effect of mandatory CSR spending on the value of non-compliance firms, consistent with the notion of deterrence theory. Further, we find that the negative impact is more pronounced among widely-held firms compared to closely-held firms, aligning with shareholder activism and information asymmetry theory. Our subsequent tests indicate that R&D intensity mitigates the negative impact, indicating a substitution relationship between CSR and R&D expenditure. Consistent with this finding, we find a lesser negative impact of CSR non-compliance on firm value of widely-held R&D intensified firms. Our findings are robust to the problem of endogeneity and self-selection bias.Practical implicationsOur findings highlight practical implications for managers regarding performance management. Managers should recognize that mandatory CSR spending can negatively impact performance, especially in widely-held firms, leading to shareholder dissatisfaction. To mitigate these effects, increasing R&D investment is likely to buffer against the adverse impacts of CSR mandates. Firm managers should align R&D efforts with CSR obligations to counterbalance costs and manage shareholder expectations, thereby maintaining performance and enhancing the perception of innovation among stakeholders.Originality/valueIt is the first study to consider the degree of compliance within firms while examining the impact of mandatory CSR spending on firm value. Also, the study is among pioneer attempts to investigate the moderating role of ownership structure and R&D intensity on the relationship.

The Information Content of Earnings: The Effects of a Change in Accounting Approach

ABSTRACTThis study leverages the adoption of ASC 606, “Revenue from Contracts with Customers,” to examine the effects of transitioning from a rules‐based to a principles‐based approach on the information content of earnings along with two of its most important attributes: predictive value and asymmetry. By introducing a common principles‐based framework, ASC 606 resolves inconsistencies found in earlier rules‐based standards and fosters uniformity in financial reporting. However, this change might also diminish the uniqueness of financial information, a critical factor in the decision‐making process. The findings reveal a significant increase in the overall market's information content of earnings post‐ASC 606 implementation. Industries with complex revenue recognition processes and long‐term contracts, such as information technology, real estate, and communications, experienced the most significant improvements. These industries benefited from the increased flexibility and professional judgment allowed under ASC 606, resulting in more accurate future earnings forecasts. However, the study also finds that ASC 606 has increased information asymmetry, particularly in industries with complex transactions. This suggests that while the principles‐based approach enhances the informativeness and predictive value of earnings, it also introduces challenges in interpreting and applying the new standards, leading to increased information asymmetry. These findings have important implications for standard setters, regulators, and practitioners in financial reporting.

Does the green finance policy affect the efficiency of corporate investment? Evidence from China's green finance reform and innovation pilot zones.

In the context of promoting the orderly expansion of capital investment and rational allocation of resources to achieve green and circular economic development. Green finance, as a new engine to promote the sustainability of enterprises, holds significant importance in exploring the positive effect of green finance policies on optimizing the investment decisions of enterprises and guiding them to efficiently utilize their resources to maximize value creation. Using A-share listed companies in Shanghai and Shenzhen from 2012 to 2022 as the research sample, we apply the Difference-in-Differences (DID) method to test the impact of the green finance reform and innovation pilot zones (2017) on the investment efficiency of enterprises in the pilot regions. We also adopt a two-step method to test the mechanisms of financial resource misallocation and agency costs. The study reveals that the green finance policy significantly enhances the investment efficiency of enterprises in the pilot areas. Financial resource misallocation and agency costs are important influence mechanisms. Drawing on resource allocation theory and agency theory, the study concludes that the green finance policy alleviates financial resource misallocation by directing financial resources toward high-efficiency enterprises. Moreover, the policy effectively reduces agency conflicts caused by power separation and information asymmetry, ensuring that enterprises can maximize the benefits of their investments. Heterogeneity analysis shows that non-state-owned enterprises and low-tech innovative enterprises in the pilot areas have disadvantages in terms of capital stock and loan credit, so the policy can improve their investment efficiency effectively. Based on these findings, we recommend that to leverage the positive effects of the green finance policy, it is essential to enhance the guiding role of the government, strengthen market mechanisms, and bolster corporate initiatives. This study complements the research on the economic effects of location-orientated comprehensive green finance policies on enterprises, considering the dual aspects of resource allocation efficiency and corporate governance, and makes up for the shortcomings of the existing literature. The study's conclusions offer valuable insights for enhancing green finance to support enterprises in achieving efficient production.

How does FinTech development drive corporate innovation? Fresh evidence from the perspective of financial supply

By constructing a city-level financial-technology (FinTech) development dataset, this study examines the impact of FinTech on corporate-innovation behavior from a financial-supply perspective. The results reveal that FinTech promotes corporate innovation by reducing corporate-financing constraints and financing costs, alleviating information asymmetry, and expanding financing channels. This promotion effect is more pronounced for private, small, and young firms, firms with fewer fixed assets, and those located in low-regulation intensity areas. Moreover, credit-based FinTech companies have a greater impact on business innovation. In addition, bank deregulation and increased bank competition crowd out the financial supply of FinTech for innovation financing. Knowledge of these impacts can help corporate managers, governments, and financial regulators to formulate more effective development strategies to promote corporate innovation.