{"title":"Role of financial inclusion and digital transformation on bank credit risk","authors":"Fan Yang, Tajul Ariffin Masron","doi":"10.1016/j.intfin.2023.101934","DOIUrl":null,"url":null,"abstract":"<div><p>As a result of information asymmetry, banks have generated many non-performing loans, jeopardizing financial stability. This paper investigates the relationship between digital transformation and credit risk and whether financial inclusion plays an interactive role. The paper employs the Generalized Method of Moments (GMM) and data from 116 Chinese banks from 2014 to 2021 to investigate the issue. The results show that digital transformation significantly and dynamically reduces bank credit risks, and inclusive finance plays an interactive role. As financial inclusion increases, this risk-reducing effect will increase, meaning that banks need to combine financial inclusion to promote bank risk reduction better and maximize risk assessment accuracy.</p></div>","PeriodicalId":48119,"journal":{"name":"Journal of International Financial Markets Institutions & Money","volume":null,"pages":null},"PeriodicalIF":5.4000,"publicationDate":"2024-01-03","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of International Financial Markets Institutions & Money","FirstCategoryId":"96","ListUrlMain":"https://www.sciencedirect.com/science/article/pii/S1042443123002020","RegionNum":2,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q1","JCRName":"BUSINESS, FINANCE","Score":null,"Total":0}
引用次数: 0
Abstract
As a result of information asymmetry, banks have generated many non-performing loans, jeopardizing financial stability. This paper investigates the relationship between digital transformation and credit risk and whether financial inclusion plays an interactive role. The paper employs the Generalized Method of Moments (GMM) and data from 116 Chinese banks from 2014 to 2021 to investigate the issue. The results show that digital transformation significantly and dynamically reduces bank credit risks, and inclusive finance plays an interactive role. As financial inclusion increases, this risk-reducing effect will increase, meaning that banks need to combine financial inclusion to promote bank risk reduction better and maximize risk assessment accuracy.
期刊介绍：
International trade, financing and investments, and the related cash and credit transactions, have grown at an extremely rapid pace in recent years. The international monetary system has continued to evolve to accommodate the need for foreign-currency denominated transactions and in the process has provided opportunities for its ongoing observation and study. The purpose of the Journal of International Financial Markets, Institutions & Money is to publish rigorous, original articles dealing with the international aspects of financial markets, institutions and money. Theoretical/conceptual and empirical papers providing meaningful insights into the subject areas will be considered. The following topic areas, although not exhaustive, are representative of the coverage in this Journal. • International financial markets • International securities markets • Foreign exchange markets • Eurocurrency markets • International syndications • Term structures of Eurocurrency rates • Determination of exchange rates • Information, speculation and parity • Forward rates and swaps • International payment mechanisms • International commercial banking; • International investment banking • Central bank intervention • International monetary systems • Balance of payments.
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