Abstract/Summary

This study examines the influence of fintech development in a region on the likelihood of corporate misconduct. The fintech has the potential to mitigate information asymmetry, provide financial resources, and enhance monitoring, thus deterring corporate misconduct. Data from publicly listed firms in China indicates that firms located in regions with advanced fintech development are less likely to engage in financial misconduct. Additionally, this study delves into the interplay between formal and informal institutions, revealing that in regions with higher levels of social trust, the effect of fintech on corporate misconduct will be less pronounced. Moreover, institutional ownership, as a prominent governance mechanism, moderates the relationship between fintech development and corporate misconduct.