Regional FinTech development and total factor productivity among firms: Evidence from China

•Regional FinTech promotes enterprise’s TFP.•Regional FinTech improves the accessibility of enterprise credit, reducing the cost of debt financing.•Regional FinTech feeds back into the level of enterprise technological innovation, enhancing enterprise’s TFP.•The promotion effect of FinTech is more pronounced for firms in high HHI regions, better business environment regions, and those without financial executive backgrounds. FinTech has been extensively applied in China in the context of high-quality development. This study quantifies the level of FinTech development in various Chinese cities based on the number of FinTech companies present, investigating the impact and mechanisms of regional FinTech development on enterprises’ Total Factor Productivity (TFP). The results indicate that FinTech significantly enhances enterprises’ TFP. This conclusion remains valid after a series of robustness tests. Mechanism analysis reveals that FinTech contributes to this improvement by enhancing credit availability of enterprises, increasing financing accessibility for businesses, reducing financing costs, alleviating financing constraints, and fostering technological innovation within enterprises. Heterogeneity analysis shows that this positive effect is more pronounced in highly competitive firms, non-financial background firms and regions with more favorable business environments. Overall, our findings demonstrate a positive impact of FinTech on enterprises’ TFP, providing new insights into its beneficial effects.