IDEAS home Printed from https://ideas.repec.org/a/mes/emfitr/v56y2020i6p1196-1210.html
   My bibliography  Save this article

Linkages and Spillovers between Internet Finance and Traditional Finance: Evidence from China

Author

Listed:
  • Rongda Chen
  • Huiwen Chen
  • Chenglu Jin
  • Bo Wei
  • Lean Yu

Abstract

Investors, researchers, and policy makers have an urgent need to understand the linkages between internet finance and traditional financial markets. This study collects corresponding daily industrial indices of the banking, security, and insurance industries from the Wind database to depict the traditional financial market in China and uses an online loan comprehensive interest rate index as a proxy for internet finance. The empirical results first show that only internet finance and the banking industry have mutual causality. Then, using conditional value at risk (CoVaR) to measure the degree of spillovers, the risk of internet finance is more likely to spill over to the banking industry, followed by the insurance industry and, lastly, the securities industry. These findings are consistent with the closeness between internet finance and the banking, insurance, and security industries, respectively. The linkage relationships and spillover effect are robust to the method and market index applied.

Suggested Citation

  • Rongda Chen & Huiwen Chen & Chenglu Jin & Bo Wei & Lean Yu, 2020. "Linkages and Spillovers between Internet Finance and Traditional Finance: Evidence from China," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 56(6), pages 1196-1210, May.
    • Handle: RePEc:mes:emfitr:v:56:y:2020:i:6:p:1196-1210
    DOI: 10.1080/1540496X.2019.1658069
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/1540496X.2019.1658069
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/1540496X.2019.1658069?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.

    Citations

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


    Cited by:

    1. Chen, Rongda & Wu, Ling & Jin, Chenglu & Wang, Shengnan, 2021. "Unintended investor sentiment on bank financial products: Evidence from China," Emerging Markets Review, Elsevier, vol. 49(C).
    2. Lorraine Muguto & Paul-Francois Muzindutsi, 2022. "A Comparative Analysis of the Nature of Stock Return Volatility in BRICS and G7 Markets," JRFM, MDPI, vol. 15(2), pages 1-27, February.
    3. Zhou, Yang & Xie, Chi & Wang, Gang-Jin & Zhu, You & Uddin, Gazi Salah, 2023. "Analysing and forecasting co-movement between innovative and traditional financial assets based on complex network and machine learning," Research in International Business and Finance, Elsevier, vol. 64(C).
    4. Jin, Chenglu & Lu, Xingyu & Zhang, Yihan, 2022. "Market reaction, COVID-19 pandemic and return distribution," Finance Research Letters, Elsevier, vol. 47(PB).
    5. Xin, Xinyi & Zhang, Anquan & Liu, Lu, 2024. "Study on the influence of Internet finance on urban household savings rate: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 90(C), pages 45-61.
    6. Zhikai Peng & Jinchuan Ke, 2022. "Spillover Effect of the Interaction between Fintech and the Real Economy Based on Tail Risk Dependent Structure Analysis," Sustainability, MDPI, vol. 14(13), pages 1-22, June.
    7. Chen, Rongda & Wang, Shengnan & Jin, Chenglu & Yu, Jingjing & Zhang, Xinyu & Zhang, Shuonan, 2023. "Comovements between multidimensional investor sentiment and returns on internet financial products," International Review of Financial Analysis, Elsevier, vol. 85(C).
    8. Zheng, Yingfei & Shen, Anran & Li, Ruihai & Yang, Yuhong & Wang, Shengjin & Cheng, Lee-Young, 2023. "Spillover effects between internet financial industry and traditional financial industry: Evidence from the Chinese stock market," Pacific-Basin Finance Journal, Elsevier, vol. 79(C).
    9. Foguesatto, Cristian Rogério & Righi, Marcelo Brutti & Müller, Fernanda Maria, 2024. "Is there a dark side to financial inclusion? Understanding the relationship between financial inclusion and market risk," The North American Journal of Economics and Finance, Elsevier, vol. 72(C).
    10. Pengpeng Yue & Aslihan Gizem Korkmaz & Zhichao Yin & Haigang Zhou, 2022. "The rise of digital finance: Financial inclusion or debt trap," Papers 2201.09221, arXiv.org.
    11. Yue, Pengpeng & Korkmaz, Aslihan Gizem & Yin, Zhichao & Zhou, Haigang, 2022. "The rise of digital finance: Financial inclusion or debt trap?," Finance Research Letters, Elsevier, vol. 47(PA).
    12. Agata Kliber & Barbara Będowska-Sójka & Aleksandra Rutkowska & Katarzyna Świerczyńska, 2021. "Triggers and Obstacles to the Development of the FinTech Sector in Poland," Risks, MDPI, vol. 9(2), pages 1-27, February.

    More about this item

    Statistics

    Access and download statistics

    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:mes:emfitr:v:56:y:2020:i:6:p:1196-1210. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/MREE20 .

    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.