Does the development of FinTech increase the risk of private lending ? Evidence from China

IF 4.8 2区经济学 Q1 BUSINESS, FINANCE

International Review of Economics & Finance Pub Date : 2024-11-01 DOI:10.1016/j.iref.2024.103721

Huixiao Guo , Ruohan Wang , Xinya Wang

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Abstract

The absence of formal regulation poses private lending a significant risk source for China's financial system. By analyzing over four million court dispute documents from 2011 to 2020 across 288 prefecture-level cities, we construct a private lending risk index to investigate the correlation between FinTech development and private lending risk. Our findings indicate that the development of FinTech leads to a significant increase of the private lending risk, with digitization level exerting the most significant promoting effect on lending risk. The micro-level analysis reveals that FinTech development attracts customers of higher quality through competitive effects, thereby lowering the threshold for participation in private lending groups and consequently amplifying lending risks. These findings remain robust to a series of tests, including various specifications and instrumental variable approaches. Moreover, the positive relationship between FinTech and private lending risks is more pronounced in contexts characterized by weaker financial supervision, limited supply of formal finance, and lower economic development.

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金融科技的发展是否增加了民间借贷的风险？来自中国的证据

正规监管的缺失使民间借贷成为中国金融体系的重要风险源。通过分析2011年至2020年288个地级市的400多万份法院纠纷文书，我们构建了民间借贷风险指数，研究金融科技发展与民间借贷风险之间的相关性。研究结果表明，金融科技的发展导致民间借贷风险显著上升，其中数字化水平对借贷风险的促进作用最为明显。微观层面的分析表明，金融科技的发展通过竞争效应吸引了更高质量的客户，从而降低了民间借贷群体的参与门槛，进而放大了借贷风险。这些发现在一系列检验（包括各种规格和工具变量方法）后仍然是稳健的。此外，在金融监管较弱、正规金融供应有限和经济发展水平较低的情况下，金融科技与民间借贷风险之间的正相关关系更为明显。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

International Review of Economics & Finance Multiple-

CiteScore

7.30

自引率

2.20%

发文量

253

期刊介绍： The International Review of Economics & Finance (IREF) is a scholarly journal devoted to the publication of high quality theoretical and empirical articles in all areas of international economics, macroeconomics and financial economics. Contributions that facilitate the communications between the real and the financial sectors of the economy are of particular interest.