Achieving high-level self-reliance in science and technology requires a science and technology finance ecosystem that is aligned with the needs of technological innovation. To overcome bottlenecks in core technologies, firms must accelerate R&D, strengthen their core competitiveness, and pursue innovation-led, quality-oriented development. Using provincial-level data for 2013–2023, this paper constructs an index system for China’s science and technology finance ecosystem from four dimensions: science and technology financial services, science and technology capital markets, science and technology financial organizations, and government guidance for science and technology. We then measure the development level of this ecosystem and employ a panel data model to examine its impact on innovation in Specialized and Sophisticated SMEs. The results show that a more developed science and technology finance ecosystem significantly promotes innovation in these firms, with a stronger effect on substantive innovation than on strategic innovation. These findings remain robust across a series of robustness checks. Further analysis reveals significant heterogeneity across regions and levels of government intervention: the positive effect is stronger in eastern China and in regions with weaker government intervention. Mechanism tests indicate that the science and technology finance ecosystem promotes innovation by facilitating the accumulation of R&D capital and the agglomeration of scientific and technological talent. This study enriches the literature on science and technology finance ecosystems and SME innovation, and provides policy-relevant evidence for ecosystem development and the cultivation of Specialized and Sophisticated SMEs.
Zhang et al. (2026) studied this question.