Abstract: With the help of an advanced search on China Financial News, financial regulation intensity indicators were constructed through a big data mining approach, and data from 2012~2019 NEEQ were used to explore the impact of financial regulation on SMEs’ technological innovation. The study found that the technological innovation output of SMEs contracted in the context of tight financial regulation. The mismatch of credit resources caused by financial discrimination makes the inhibitory effect of financial regulation on firms’ innovation capacity only exist in small, medium and private firms, while the effect on large, state-owned firms is not significant. The analysis of the mechanism shows that the macro financial ecosystem has a benign moderating role in the relationship between financial regulation and SME innovation; while tighter financial regulation can ultimately have a negative impact on the technological innovation output of SMEs by increasing their financing constraints. The findings of the study provide policy insights for improving China’s financial regulatory framework, opening up channels for financial services to the real economy, and promoting the innovation development of SMEs.

Key words: financial regulation, SMEs, technological innovation