Can FinTech development pave the way for a transition towards inclusive growth: Evidence from an emerging economy.

• The nexus between FinTech development and inclusive growth is analyzed. • The indicator system for inclusive growth is established. • The spatial econometric approach and machine learning are applied. • The case of an emerging economy is considered. This study investigates the impact of financial technology (FinTech) on inclusive growth (IG) by exploiting a panel of 281 prefecture-level Chinese cities in the years 2011–2020 using the spatial econometric model and machine learning algorithm. The results show that FinTech positively impacts IG, while there is no spatial spillover effect. The evidence from the machine learning algorithms suggests that as FinTech advances to a higher level, its positive impact on IG increases. The mechanism test shows that the latter effect is achieved through entrepreneurial stimulation and human capital enhancement. Moreover, the impact of FinTech on IG is more pronounced in large and medium-sized cities and cities in the eastern region. However, it does not significantly affect small cities or cities in the central region. This paper, therefore, offers new insights on the interaction between FinTech and IG along with the analysis of the effects related to the development of FinTech on IG in China. [Display omitted] [ABSTRACT FROM AUTHOR]