Do financial innovations influence bank performance? Evidence from China
Studies in Economics and Finance
ISSN: 1086-7376
Article publication date: 8 September 2023
Issue publication date: 3 June 2024
Abstract
Purpose
The rapid growth of Fintech presents a growing challenge for banking institutions, particularly those with more traditional, service backgrounds. This paper aims to examine the relationship between Fintech innovation and bank performance by exploiting novel Chinese market data.
Design/methodology/approach
Guided by the work of Dietrich and Wanzenried (2011, 2014) and Phan et al. (2019), the authors construct a regression model to investigate the effect of Fintech innovation on the profitability of Chinese listed banks. The authors include their measures of Fintech innovation in each of their selected structures.
Findings
Results indicate that Fintech innovation is negatively associated with bank performance and that state-owned banks, joint-stock commercial banks and long-established banks are more negatively impacted by Fintech innovation relative to city and rural commercial banks and younger banks.
Originality/value
Risk tolerance levels, internal structure and efficiency and recent debt repayment performance channels are each shown to be significant, robust explanatory factors underpinning such results.
Keywords
Citation
Corbet, S., Hou, Y.(G)., Hu, Y., Oxley, L. and Tang, M. (2024), "Do financial innovations influence bank performance? Evidence from China", Studies in Economics and Finance, Vol. 41 No. 2, pp. 241-267. https://doi.org/10.1108/SEF-02-2022-0119
Publisher
:Emerald Publishing Limited
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