This paper investigates the impact of local fintech development on analysts’ earnings forecast accuracy. We use the method of web text mining to construct the local fintech development index for empirical test and find that local fintech development significantly improves analysts’ earnings forecast accuracy by promoting firm digital transformation, improving firm information transparency, and alleviating the information asymmetry between firms and outsiders. Furthermore, this effect is more significant for analysts without equity pledge associations and those with weaker buy-side pressure. This study shows that local fintech development can optimize the capital market information environment.

This study investigates the effect of financial technology (FinTech) development on stock price crash risk. We show that the development of FinTech can inhibit management from deliberately hiding bad news and alleviate information asymmetry, thereby reducing stock price crash risk. This effect is more pronounced among non-state-owned enterprises, firms with poor information environments and low-quality internal controls, and those in competitive industries and regions with high marketization. Overall, these findings suggest that the development of FinTech can mitigate the deliberate concealment of bad news by management and improve the timeliness of disclosure, leading to lower risks faced by investors.