Fintech development and bank risk taking in China
By Rui Wang, Jiangtao Liu, H. Luo. 2020
256 citations recorded by the source corpus.
ABSTRACT This paper empirically tests the effect of FinTech development on bank risk taking using unbalanced bank-level panel data from China for the period from 2011 to 2018. We use the media's attention paid to FinTech-related information to gauge FinTech development. We find robust evidence that the development of FinTech exacerbates banks’ risk taking in general. The heterogeneity analysis further indicates that the asset quality deterioration effect brought about by prosperous FinTech is more salient in banks with larger sizes, lower efficiency, more shadow banking business and more interest-based income. Moreover, the nexus between FinTech and banks’ risk taking is a U-shaped trend, with FinTech initially intensifying and then weakening banks’ risk taking. Moreover, the banks’ responses regarding the U-shaped effect are heterogeneous among different ownership structures. The responses by state- and jointly owned banks are not notable, while those of city banks, foreign banks and rural banks are more sensitive.
Subfields: Economics and Econometrics, Finance, Management Information Systems
View Paper: https://www.semanticscholar.org/paper/902fc0751f8c90ed275a8f2d5786167027cab6f1
How researchers see this paper
The researchers whose trusted networks rank it highest, strongest advocate first. Every researcher gets a different order.
Citations in the corpus
- FinTech and commercial banks' performance in China: A leap forward or survival of the fittest? (2021, background): “Companies that are reluctant to adapt FTPs have lost their competitive advantages (Wang et al., 2020).”
- Does technology innovation in finance alleviate financing constraints and reduce debt-financing costs? Evidence from China (2021, background): “The application of DF has changed the rules, ecology, and business models of the financial industry (Lee and Shin 2018), and affected the risk-taking pattern of banks (Wang, Liu, and Luo 2020), and put forward new challenges to financial supervision (Buchak, Matvos, and Piskorski 2018).”