2.1. Research on FinTech
FinTech is a new business model that combines financial services innovation with the latest Internet technologies [11
]. Since FinTech is still a relatively new industry, its meaning is not well defined. However, scholars generally agree that FinTech is a technical means that applies science and technology to the financial industry, serves the general public, reduces industry costs, and improves industry efficiency. It extensively affects financial payment, financing, loans, investment, financial services, and currency operations [12
]. FinTech has become the driving force of financial demand discovery, financial product and service innovation, and social wealth creation. It can be said that FinTech is the commanding height of the future financial industry, playing a strategic and decisive role in the next round of global financial development with huge market potential. According to recent statistics, 38% of the world’s population has no official bank account, and another 40% cannot obtain adequate bank services. This indicates an enormous market for FinTech development [13
FinTech research has attracted widespread interest among scholars. Lee and Teo [8
] believe that although FinTech is at its initial stage of development, it will define and reshape the future of the financial industry. At the same time, FinTech enhances financial inclusion and accelerates “disintermediation”, and it provides a new level for the development of the real economy, especially in areas with poor economic performance, where FinTech has a greater scope to function. On the other hand, some scholars advocate that financial capital can also enter a new “risk boundary” within the current institution and policy framework [14
]. The entire financial service industry has been fundamentally disrupted [15
]. Fenwick et al. [16
] explored the influence of FinTech on household credit scoring. On the one hand, they believed that FinTech companies could use big data to improve the scoring accuracy of algorithms, reduce the cost and improve the convenience of credit access. Nevertheless, in their view, the algorithms also have a potential “dark side” of illegal statistical discrimination. They believed the FinTech use, especially big data and algorithm scoring, could increase the degree of loan discrimination. For example, they find that African American and Hispanic borrowers had a loan rejection rate of 5% higher. Legal risk is also a major problem in the development of FinTech [17
]. Jagtiani and Lemieux [13
] argued that FinTech could place banks in an unfair competitive environment because FinTech companies were subject to different regulatory conditions. For example, The Federal Deposit Insurance Corporation (FDIC) and the Consumer Financial Protection Bureau (CFPB) are concerned about the consumer credit access conditions and credit privacy offered by FinTech companies. That’s why the new developments in financial high-tech dominated by start-ups have challenged both regulators and market participants, especially in balancing the potential benefits of innovation and the risks.
Affected by disruptive innovation and the balance of financial stability and innovation, FinTech supervision should adhere to the basic principles of containing systemic risks and protecting consumer interest to promote innovation and improve the inclusiveness of digital finance to appropriately handle the balance between FinTech innovation and supervision [18
]. Only in this way can the positive effects of financial science and technology be achieved. In this regard, this paper reveals the impact of the development of financial science and technology on the control of agricultural NPS pollution, which can help design innovate regulatory methods to improve the environment.
2.2. Research on Agricultural NPS Pollution Control
The theory of agricultural NPS pollution control has been developed for a long time [19
]. This research began in developed countries such as the United States and the United Kingdom in the 1960s. There are two types of economic policy: “Pigou means” and “Coase means”. “Pigou means” focus on vertical government intervention, and “Coase means” emphasize horizontal adjustment of market mechanisms [20
In the “Pigou means”, taxes, financial subsidies, and administrative interventions are the most widely used tools. In terms of tax policy, Griffin and Bromley [21
] took the lead in advocating for tax on agricultural means of production, such as pesticides and fertilizers, to control agricultural NPS pollution. Shortle and Dunn [22
] also affirmed this “input tax”. In a follow-up study, Segerson [23
] established a mechanism including “fixed penalty + overall taxation” to tax polluters. Under this mechanism, taxation policies are more efficient, but when there is informational asymmetry, polluters can obtain higher profits through “collusion” [24
]. Consequently, some scholars have suggested that with incomplete information, the key to agricultural NPS pollution control was to motivate farmers [25
]. To this end, Ribaudo [26
] and Griesinger et al. [27
] advocated for the use of financial subsidies to guide farmers to employ “green technology”. In terms of administrative intervention, Egan and Mahoney [28
] advocated strengthening judicial, legislative and regulatory procedures for the agricultural NPS pollution control. As a whole, “Pigou means” requires a much more active government participation and higher management cost [29
In the “Coase means”, tools such as sewage charges and carbon emission permit trading are widely used. They are generally considered to be effective or cost-effective [30
], which can encourage polluters to adopt new technologies and reduce the marginal benefits of violations [31
]. However, whether they can achieve the policy objective depends on the initial allocation quantity and distribution. For example, Tanaka [32
] constructed a multi-sector emission trading model that included oligopoly and perfect competition industries. A finding is that increasing the initial allocation of emissions rights in the oligopoly industry would increase its output levels. Moreover, raising the initial allocation of “cleaning” companies would lead to a decline in output and license prices. However, both environmental regulators and companies tend to distribute licenses freely because it is possible to build “entry barriers” and bring rental income [33
]. In fact, it also increases the cost of governance and restricts the participation from other market players, leading to inefficient governance. Therefore, to improve the efficiency of governance, an auction mechanism should be established [34
]. In this way, the distribution of licenses depends on the licensed market price, market demand, and the use of “cleaning technology”, thereby reducing distribution costs and improving governance efficiency.
As a whole, the “Pigou means” has great limitations both on the subjective level and tool level. Agricultural NPS pollution control still needs to be explored from the level of “Coase means”. Financial instruments, especially the newly developed FinTech, are very important in the “Coase Means”.
Based on the literature review so far, more research is still needed in the following aspects. The control methods and tools for agricultural NPS pollution still rely on administrative means, so the economic policy toolbox needs to be further expanded. As an important part of economic policies, the financial policy should play an important role in agricultural NPS pollution control. Therefore, it is important to study the impact of financial development on agricultural NPS pollution control. What’s more, most developing countries have always faced the financial repression problems, but with the help of FinTech, these problems can be alleviated. At present, with the rapid development of data technology represented by distributed technology, interconnect technology, artificial intelligence, the FinTech industry is rapidly emerging. It is necessary and urgent to reveal and evaluate its impact on agricultural NPS pollution. Research in this field is still very rare. On the one hand, our research results can improve the market-oriented toolbox for agricultural NPS pollution control. On the other hand, our research can also diagnose the current “green development effect” of FinTech, identifying existing problems, proposing appropriate solutions, and helping to achieve sustainable development.