The Impact of Technology Finance Policy on Entrepreneurial Activities—An Empirical Study Based on a Spatial DID Model

ABSTRACT Entrepreneurial activity (EA) injects new economic growth momentum and absorbs a large labor force, serving as a crucial solution to high unemployment and economic downturns. Technology Finance Policy (FTI) breaks traditional financial constraints, offering more comprehensive and accessible financial services for startups. Based on panel data from 278 Chinese cities, this study employs the spatial difference‐in‐differences (SDID) model to investigate the impact and mechanisms of FTI on EA. The findings reveal that: (1) FTI significantly enhances local EA and generates positive spatial spillover effects within a 700 km radius. (2) FTI indirectly boosts both local and neighboring cities' EA through resource allocation and technological innovation. (3) The impact of FTI on EA is particularly pronounced in non‐resource‐based cities, highly marketized regions, and areas with strong government intervention, where significant spatial spillover effects are observed. However, in resource‐based cities, the effect is negligible. In regions with low government intervention, while FTI fosters local EA, it exerts a siphoning effect, leading to negative spillovers in adjacent areas. This study provides empirical insights for local governments to better integrate FinTech with entrepreneurship, promoting economic stability and growth.