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Does FinTech Promote Entrepreneurship? Evidence from China
Alraqeb Zeynep, Knaack Peter, Macaire Camille 2022-12-27
The rise of financial technology (FinTech) in China over the past decade has changed the traditional financial landscape in the country. We provide evidence on the role of digital financial services in promoting self-employment. We construct an indicator of relative FinTech adoption at the provincial-level in China. We show that the digitalization of financial services at an aggregated level is associated with a higher share of self-employed individuals in the total population. In rural areas, coverage breadth of digitalized financial services drives the positive impact on the share of self-employment, while in urban areas, digitalized insurance services appear to be more influential. We also show that the shift to self-employment is not at the expense of employment in private firms in the country.
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