Banking Deregulation and Regional Fintech Development
Ensuring reasonable and robust liquidity is crucial for fostering economic growth.This paper investigates the role of liquidity in shaping corporate financing decisions and its subsequent impact on corporate investment choices and macroeconomic growth.By examining the dual aspects of corporate financing—liquid demand and investment de-mand—this study elucidates how liquidity dynamics influence economic behavior.Our analysis indicates that merely in-creasing nominal liquidity without a corresponding rise in liquidity value support can diminish real purchasing power and exacerbate liquidity constraints.As a result,companies often allocate a larger share of their financing to meet imme-diate liquidity needs for survival.Furthermore,a reduction in liquidity value support leads firms to increase their overall financing demand.Even when firms obtain liquidity,they tend to prioritize these funds for immediate operational ex-penses rather than long-term investments.This study highlights the complex relationship between liquidity and economic activity,emphasizing the need for policymakers to accurately gauge and maintain adequate liquidity levels to ensure that finance effectively supports the real economy.By preventing liquidity-induced financial risks,policymakers can better safeguard economic stability and promote sustainable growth.
FintechBanking deregulationFinancial regulationFinancial development
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