Banking fintech and corporate innovation in China’s carbon-intensive industries: evidence from different panel approaches

Abstract The maturity mismatch paradox of investment and financing has led to the inefficient upgrading of carbon-intensive industries, and fintech in the banking system has the potential to solve this problem. By utilizing the loan information of Chinese listed companies and banks’ digital transformation index to construct a firm-level banking fintech index, this study aims to investigate the effect of banking fintech on the innovation of firms in carbon-intensive industries. Empirical results show that banking fintech can significantly boost corporate innovation and help carbon-intensive industries address the financing challenges of transformation and innovation. The results remain robust after the use of instrumental variables, dynamic panel models, and quasi-natural experimental methods to account for potential endogeneity. The enabling effect of banking fintech operates through dual pathways: in the quantitative dimension, it helps enhance corporate financial resilience and alleviate financing constraints; in the qualitative dimension, it facilitates breaking down information barriers between banks and enterprises while directing capital flows toward high-potential innovation projects. Additionally, the impact of banking fintech in promoting innovation is greater for large enterprises and state-owned enterprises. Implications and recommendations for financial policies and fintech policies for carbon-intensive industries are presented.