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FinTech innovation regulation based on reputation theory with the participation of new media

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  • Zhou, Xi
  • Chen, Shou

Abstract

The information asymmetry caused by the virtual nature of the Internet is a challenge faced by FinTech innovation regulation, whereas new media participation makes the information environment more complex. From the perspective of finding a dynamic balance between innovation and regulation, this study considers reputation adjustment under new media participation, as well as the corresponding selection of an innovation path. It is found that the equilibrium strategy of an excessive innovative FinTech platform is directly related to its time preference. For platforms that pay more attention to the current interests, the high-pressure regulatory environment and public opinion supervision can effectively restrain excessive innovation, whereas for platforms that focus on long-term interests, appropriate relaxation of regulatory pressure and public opinion environment can encourage the platform to maintain its reputation by pretending to be compliant.

Suggested Citation

  • Zhou, Xi & Chen, Shou, 2021. "FinTech innovation regulation based on reputation theory with the participation of new media," Pacific-Basin Finance Journal, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:pacfin:v:67:y:2021:i:c:s0927538x2100072x
    DOI: 10.1016/j.pacfin.2021.101565
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    Cited by:

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    2. Mengzhu Xu & Zixin Liu & Changjin Xu & Nengfa Wang, 2024. "Evolutionary Game Analysis of Digital Financial Enterprises and Regulators Based on Delayed Replication Dynamic Equation," Mathematics, MDPI, vol. 12(3), pages 1-18, January.
    3. Hao Fu & Yue Liu & Pengfei Cheng & Sijie Cheng, 2022. "Evolutionary Game Analysis on Innovation Behavior of Digital Financial Enterprises under the Dynamic Reward and Punishment Mechanism of Government," Sustainability, MDPI, vol. 14(19), pages 1-18, October.
    4. Zhao, Xiaoqing & Yao, Chen, 2024. "Exacerbation or suppression? Digital transformation and shadow banking activities of non-financial firms," Finance Research Letters, Elsevier, vol. 61(C).
    5. Lei Xu & Qian Liu & Bin Li & Chen Ma, 2022. "Fintech business and firm access to bank loans," Accounting and Finance, Accounting and Finance Association of Australia and New Zealand, vol. 62(4), pages 4381-4421, December.
    6. Rabbani, Mustafa Raza & Billah, Syed Mabruk & Shaik, Muneer & Rahman, Mashuk & Boujlil, Rhada, 2023. "Dynamic connectedness, spillover, and optimal hedging strategy among FinTech, Sukuk, and Islamic equity markets," Global Finance Journal, Elsevier, vol. 58(C).

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    More about this item

    Keywords

    FinTech innovation; Regulation; Information asymmetry; Reputation; New media;
    All these keywords.

    JEL classification:

    • C73 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Stochastic and Dynamic Games; Evolutionary Games
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
    • G14 - Financial Economics - - General Financial Markets - - - Information and Market Efficiency; Event Studies; Insider Trading
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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