Bank fintech and lending distance: The role of information asymmetry and risk management channels

Abstract

This study explores the impact of bank fintech on lending distance by using loan data from Chinese listed firms and commercial banks between 2013 and 2022, along with commercial bank fintech patent data. The findings indicate that bank fintech effectively increases the lending distance between banks and enterprises, primarily by reducing information asymmetry and enhancing risk management capacity. This is particularly evident for enterprises located in regions with scarce financial resources, enterprises in their growth or maturity stages, large-scale enterprises, and large state-owned commercial banks. Additionally, the increase in lending distance driven by bank fintech is associated with an extension in firms’ debt maturity, without a corresponding increase in the probability of default. These findings not only provide empirical evidence for implementing and promoting fintech development plans, but also offer valuable insights into the synchronized high-quality development of the financial industry and the real economy.