IDEAS home Printed from https://ideas.repec.org/a/eee/finlet/v58y2023ipas1544612323006918.html
   My bibliography  Save this article

How digital transformation affects bank risk: Evidence from listed Chinese banks

Author

Listed:
  • Chen, Zhenyun
  • Li, Huxing
  • Wang, Tianbo
  • Wu, Junxian

Abstract

In the digital age, the impact of digital transformation on business risk has become significant. This paper utilizes panel data from 36 listed banks in China from 2011 to 2021 to explore the diverse effects of digital transformation on bank risk-taking and its transmission channel. The findings reveal that digital transformation significantly decreases bank risk-taking. Additionally, while large and national banks show no substantial reduction in risk-taking, small and medium-sized, as well as regional banks, benefit significantly. Furthermore, the study demonstrates that bank profitability plays a key role in the risk reduction facilitated by digital transformation.

Suggested Citation

  • Chen, Zhenyun & Li, Huxing & Wang, Tianbo & Wu, Junxian, 2023. "How digital transformation affects bank risk: Evidence from listed Chinese banks," Finance Research Letters, Elsevier, vol. 58(PA).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006918
    DOI: 10.1016/j.frl.2023.104319
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S1544612323006918
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.frl.2023.104319?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Llopis-Albert, Carlos & Rubio, Francisco & Valero, Francisco, 2021. "Impact of digital transformation on the automotive industry," Technological Forecasting and Social Change, Elsevier, vol. 162(C).
    2. Sascha Kraus & Paul Jones & Norbert Kailer & Alexandra Weinmann & Nuria Chaparro-Banegas & Norat Roig-Tierno, 2021. "Digital Transformation: An Overview of the Current State of the Art of Research," SAGE Open, , vol. 11(3), pages 21582440211, September.
    3. Cheng, Maoyong & Qu, Yang, 2020. "Does bank FinTech reduce credit risk? Evidence from China," Pacific-Basin Finance Journal, Elsevier, vol. 63(C).
    4. Tang, Kin Leong & Ooi, Chee Keong & Chong , Jia Bao, 2020. "Perceived Risk Factors Affect Intention To Use FinTech," Journal of Accounting and Finance in Emerging Economies, CSRC Publishing, Center for Sustainability Research and Consultancy Pakistan, vol. 6(2), pages 453-463, June.
    5. Wu, Keping & Fu, Yumei & Kong, Dongmin, 2022. "Does the digital transformation of enterprises affect stock price crash risk?," Finance Research Letters, Elsevier, vol. 48(C).
    6. Ye Guo & Chen Liang, 2016. "Blockchain application and outlook in the banking industry," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-12, December.
    7. Truant, Elisa & Broccardo, Laura & Dana, Léo-Paul, 2021. "Digitalisation boosts company performance: an overview of Italian listed companies," Technological Forecasting and Social Change, Elsevier, vol. 173(C).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Liu, Zhonglu & Li, Jun & Sun, Haibo, 2024. "Climate transition risk and bank risk-taking: The role of digital transformation," Finance Research Letters, Elsevier, vol. 61(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhou, Zhongsheng & Li, Zhuo, 2023. "Corporate digital transformation and trade credit financing," Journal of Business Research, Elsevier, vol. 160(C).
    2. Du, Juntao & Shen, Zhiyang & Song, Malin & Zhang, Linda, 2023. "Nexus between digital transformation and energy technology innovation: An empirical test of A-share listed enterprises," Energy Economics, Elsevier, vol. 120(C).
    3. Mihaela Brindusa Tudose & Amalia Georgescu & Silvia Avasilcăi, 2023. "Global Analysis Regarding the Impact of Digital Transformation on Macroeconomic Outcomes," Sustainability, MDPI, vol. 15(5), pages 1-21, March.
    4. Patel, Ritesh & Migliavacca, Milena & Oriani, Marco E., 2022. "Blockchain in banking and finance: A bibliometric review," Research in International Business and Finance, Elsevier, vol. 62(C).
    5. Rui Wang, 2023. "Blockchain and Bank Lending Behavior: A Theoretical Analysis," SAGE Open, , vol. 13(1), pages 21582440231, March.
    6. Lei Wang & Shibo Liu & Wanfang Xiong, 2022. "The Impact of Digital Transformation on Corporate Environment Performance: Evidence from China," IJERPH, MDPI, vol. 19(19), pages 1-19, October.
    7. Ruihui Pu & Deimante Teresiene & Ina Pieczulis & Jie Kong & Xiao-Guang Yue, 2021. "The Interaction between Banking Sector and Financial Technology Companies: Qualitative Assessment—A Case of Lithuania," Risks, MDPI, vol. 9(1), pages 1-22, January.
    8. Xiang, Xiandeng & Jiang, Lan, 2023. "Digitalisation and commercial bank performance: A test of heterogeneity from Chinese commercial banks," Finance Research Letters, Elsevier, vol. 58(PA).
    9. Sharma, Gagan Deep & Tiwari, Aviral Kumar & Chopra, Ritika & Dev, Dhairya, 2024. "Past, present, and future of block-chain in finance," Journal of Business Research, Elsevier, vol. 177(C).
    10. Chengwei Ge & Wendong Lv & Junli Wang, 2023. "The Impact of Digital Technology Innovation Network Embedding on Firms’ Innovation Performance: The Role of Knowledge Acquisition and Digital Transformation," Sustainability, MDPI, vol. 15(8), pages 1-21, April.
    11. Tang, Mengxuan & Hu, Yang & Corbet, Shaen & Hou, Yang (Greg) & Oxley, Les, 2024. "Fintech, bank diversification and liquidity: Evidence from China," Research in International Business and Finance, Elsevier, vol. 67(PA).
    12. Boqiang Lin & Qianxiang Zhang, 2023. "Corporate environmental responsibility in polluting firms: Does digital transformation matter?," Corporate Social Responsibility and Environmental Management, John Wiley & Sons, vol. 30(5), pages 2234-2246, September.
    13. Wei, Lang & Zhang, Yiling, 2023. "Nonfinancial indicators in identifying stock price crash risk," Finance Research Letters, Elsevier, vol. 52(C).
    14. Zhu Yongjie, 2023. "Enterprise life cycle, financial technology and digital transformation of banks—Evidence from China," Australian Economic Papers, Wiley Blackwell, vol. 62(3), pages 486-500, September.
    15. Ilya Ivaninskiy & Irina Ivashkovskaya & Joseph A. McCahery, 2023. "Does digitalization mitigate or intensify the principal-agent conflict in a firm?," Journal of Management & Governance, Springer;Accademia Italiana di Economia Aziendale (AIDEA), vol. 27(3), pages 695-725, September.
    16. Fan, Chenguang & Bae, Seongho & Liu, Yu, 2024. "Can FinTech transform corporate liquidity? Evidence from China," Innovation and Green Development, Elsevier, vol. 3(2).
    17. Hongqin Tang & Jianping Zhu & Nan Li & Weipeng Wu, 2024. "Impact of Enterprise Supply Chain Digitalization on Cost of Debt: A Four-Flows Perspective Analysis Using Explainable Machine Learning Methodology," Sustainability, MDPI, vol. 16(19), pages 1-27, October.
    18. Alev Ozer Torgaloz & Mehmet Fatih Acar & Cemil Kuzey, 2023. "The effects of organizational learning culture and decentralization upon supply chain collaboration: analysis of covid-19 period," Operations Management Research, Springer, vol. 16(1), pages 511-530, March.
    19. Alfiero, Simona & Battisti, Enrico & Ηadjielias, Elias, 2022. "Black box technology, usage-based insurance, and prediction of purchase behavior: Evidence from the auto insurance sector," Technological Forecasting and Social Change, Elsevier, vol. 183(C).
    20. Fatih Gurcan & Gizem Dilan Boztas & Gonca Gokce Menekse Dalveren & Mohammad Derawi, 2023. "Digital Transformation Strategies, Practices, and Trends: A Large-Scale Retrospective Study Based on Machine Learning," Sustainability, MDPI, vol. 15(9), pages 1-23, May.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:finlet:v:58:y:2023:i:pa:s1544612323006918. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/frl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.