Driving industrial growth: The role of fintech and bigtech credit in financially dependent sectors

This study examines the impact of fintech credit and bigtech credit, collectively referred to as total alternative credit, on the growth and share of industry value added across 70 countries from 2013 to 2019. Data on alternative finance are drawn from Cornelli et al. (2023), while industry value-added statistics are obtained from the United Nations Industrial Development Organization (UNIDO). The findings indicate that total alternative credit is positively associated with both the growth and the share of industry value added. Furthermore, industries that are more dependent on external finance exhibit lower value-added growth and a smaller share of the industry relative to less dependent industries. However, these financially dependent industries benefit disproportionately from alternative credit, as reflected in the positive interaction between alternative finance and financial dependence. The role of alternative credit is also found to vary across macroeconomic contexts, including bank competition, financial development, economic growth, the regulatory environment, and financial freedom. Overall, the results are robust to alternative estimation techniques and support the theoretical argument that digital platforms enhance financial innovation and inclusion by reducing information asymmetry and financing costs.