Author Information：

1.Weiqing Chen, Business School, East China University of Science and Technology, Shanghai, China 200237. Email: xyy2008xyy@126.com.

2.Futie Song, Business School, East China University of Science and Technology, Shanghai, China 200237. Email: ftsong@ecust.edu.cn. 

3.Zhiqiang Ye, Business School, East China University of Science and Technology, Shanghai, China 200237. Email: yzq2011wzy@ecust.edu.cn. 

4.Shunming Zhang, Corresponding author. Financial Policy Research Center and School of Finance, Renmin University of China, Beijing, China 100872. Email: szhang@ruc.edu.cn. ORCID: 0000-0003-2961-7699.

5.Jiefei Zheng, National Forestry Economics and Development Research Center, State Forestry Administration, Beijing, China 100714. Email: zhengjiefei1987@163.com.

Abstract:

Firms can leverage Fintech to optimize capital allocation. This paper examines the impact of China's 2016 Fintech regulatory policy on firms' financialization, along with its influencing mechanisms and economic consequences. The results show that Fintech regulatory policies significantly reduce the information transparency and internal control of Chinese listed companies, thereby weakening both the precautionary and speculative motives for financial asset investment. Consequently, these policies lead to a decline in listed companies' financial asset investment, as well as a reduction in their physical asset investment, short-term profits, and long-term value. Therefore, this paper not only contributes to the existing literature on Fintech and firms' financialization, but also offers valuable policy insights for optimization of Fintech regulation framework.