Can Regulatory Sandboxes Enhance Financial System Resilience: A Systems Perspective on Regional Risk Mitigation Evidence from China

Financial systems are quintessential complex adaptive systems, where stability emerges from the dynamic interactions among multiple subsystems and regulatory components. Grounded in systems theory, this study re-frames the establishment of China’s fintech regulatory sandbox as a systemic intervention within the broader financial governance framework. Utilizing this policy as a quasi-natural experiment, we employ a difference-in-differences (DID) model integrated with spatial econometric modeling to evaluate its impact on regional financial system risk—an emergent property of the system. The benchmark regression results indicate that this systemic policy innovation significantly enhances regional financial resilience, with effects that are both continuous and robust. Mechanism tests, analyzed through the lens of subsystem coordination, demonstrate that the policy curbs systemic risk by improving the synergy within economic inner cycles, outer cycles, and their dual-cycle integration, thereby optimizing the system’s internal structure and feedback loops. Further analysis reveals a significant negative spatial spillover effect, evidencing the policy’s role in reshaping inter-regional systemic linkages: it reduces financial risk in both implementing and neighboring regions, with the effect’s intensity following an inverted U-shaped pattern relative to distance. Heterogeneity analysis shows that the policy’s inhibitory effect varies significantly across different systemic configurations, including risk circulation patterns, macro–micro risk perspectives, financial inclusion coverage, government–market relationships, and the north–south regional divide. These findings provide critical insights for developing synergistic macro-prudential and micro-behavioral regulatory mechanisms, contributing to a more robust and adaptive financial security framework from a systems governance perspective.