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The Impact of Internet Finance on Bank Profitability. Evidence from The Chinese Commercial Banks

Author

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  • Apostolos Dasilas

    (Department of Applied Informatics, University of Macedonia, Greece)

  • Goran Karanovic

    (Faculty of Tourism and Hospitality Management, University of Rijeka, Croatia)

Abstract

Research Question- Does internet finance, measured by P2P lending and third-party payment, affect bank profitability? Motivation- Prior studies have focused on the adoption, development, determinants, acceptance, risks and customer satisfaction using data from developed markets, while the impact of internet finance on bank profitability remains understudied. Our study aims to fill this research gap by investigating the impact of internet finance on the profitability of Chinese banks. Idea- Employing static panel data regression analysis and this study explores whether internet finance, measured by P2P lending and third-party payment, affects bank profitability. Data- We use data from 51 Chinese listed commercial banks during the period 2012-2019. Data were culled from CSMAR database and iResearch website. Findings- The results show that internet finance exerts a positive effect on bank profitability for state-owned and joint-stock commercial banks, but adversely affects the profitability of regional commercial banks Contribution- This is the first study that investigates the effect of internet finance on the profitability of state-owned, joint-stock and regional commercial banks separately. In addition to bank-specific variables, this study also considers macroeconomic variables that have been alleged to affect bank profitability.

Suggested Citation

  • Apostolos Dasilas & Goran Karanovic, 2023. "The Impact of Internet Finance on Bank Profitability. Evidence from The Chinese Commercial Banks," Journal of Accounting and Management Information Systems, Faculty of Accounting and Management Information Systems, The Bucharest University of Economic Studies, vol. 22(4), pages 591-608, December.
    • Handle: RePEc:ami:journl:v:22:y:2023:i:4:p:591-608
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    References listed on IDEAS

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    More about this item

    Keywords

    Internet finance; bank profitability; commercial banks;
    All these keywords.

    JEL classification:

    • G15 - Financial Economics - - General Financial Markets - - - International Financial Markets
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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