FinTech and SME' performance: Evidence from China*

Although many papers have explored the factors influencing the performance of Small and medium-sized enterprises (SMEs), they have neglected the perspective of FinTech. On this basis, this study explores the impact of FinTech on SMEs' performance using data from NEEQ-listed companies in China from 2011 to 2020. The empirical results show that FinTech can significantly improve SMEs' performance. The mechanism test shows that FinTech can enhance SMEs' performance by expanding the financing scale and reducing financing costs, that is, alleviating financing constraints. Heterogeneity analysis finds that the positive relationship between FinTech and SME' performance is more significant among smaller firms, higher growth firms, and better regional marketization. Overall, this study provides theoretical and practical guidelines on how to effectively use FinTech to alleviate the financing problems of SMEs and thus improve their performance.