Governing China’s FinTech ecosystem: The role of open system intermediaries

Authors: Vladimir Pazitka*, University of Oxford, Dariusz Wójcik, University of Oxford, Wei Wu, University of Oxford
Topics: Economic Geography, China
Keywords: FinTech ecosystems, governance of entrepreneurial ecosystems, open system intermediaries, meta-organization
Session Type: Virtual Paper
Day: 4/9/2021
Start / End Time: 1:30 PM / 2:45 PM
Room: Virtual 47
Presentation File: No File Uploaded

Entrepreneurial ecosystems in emerging economies face resource scarcities, structural gaps and institutional voids. In the case of China’s FinTech ecosystem, these obstacles have surfaced during the internet finance fiasco of 2016/17. The fintech ecosystem in the People’s Republic of China has unique characteristics shaped by China’s institutional environment and politics. The ecosystem is anchored by financial services incumbents and big technology companies, yet its design has been heavily influenced by the agenda of the Chinese government’s primary objectives – economic development and Party control. The focus of our analysis is on how open system intermediaries (OSIs) including government sponsored science parks and privately sponsored accelerators facilitate the development of China’s FinTech ecosystem. We draw on insights from 50 elite interviews with financial and business services professionals working in banks, law, accounting, management consulting and technology firms. Our results indicate that OSIs facilitate the development of China’s FinTech ecosystem through venture validation, capability building and market infrastructure development. We find that government sponsored OSIs are primarily focused on market infrastructure development, while privately sponsored OSIs devote most attention to venture validation and capability building. The support provided by OSIs appears to be channeled towards FinTech ventures, which have the potential to improve the services and business infrastructure of financial services incumbents, rather than to fundamentally disrupt their business models.

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