How fintech impacts pre‐ and post‐loan risk in Chinese commercial banks

Wang, Shuyao; Liu, Bai; Liu, Pei

doi:10.1002/ijfe.2284

Cited by 44 publications

(20 citation statements)

References 66 publications

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“…For instance, the classic conceptualisation of the resources and capabilities that can generate competitive advantages suggests that they have to be valuable, rare, inimitable and organised for exploitation (Barney & Clark, 2007). But in the light of a fintech platform's dual identity, what does it mean for a fintech platform that is primarily more of a tech firm (e.g., T. Tan et al, 2020), or more of a financial firm (e.g., a fintech subsidiary set up by an incumbent financial institution ‐ see Zhang et al, 2020)? It is likely that the strategic resources and capabilities at the platforms' disposal will be different in the two contexts because they are path dependent (Schreyögg & Kliesch‐Eberl, 2007).…”

Section: Analysis and Discussionmentioning

confidence: 99%

The strategic options of fintech platforms: An overview and research agenda

Tan

Sun

et al. 2022

Information Systems Journal

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The failure rate of fintech platforms is disproportionately high, which may be because (1) there is a lack of published knowledge on the appropriate strategies to adopt and/or (2) the traditional prescriptions for strategy may be less relevant in the context of fintech platforms. To ascertain either or both of these possibilities, we conducted a comprehensive review of the fintech literature and found that not only is there a relative paucity of research on Fintech Strategies, but there are also important limitations associated with the existing works. To address these limitations, we first identified the unique characteristics of fintech platforms and the strategic implications of those characteristics. Next, we adapted a framework made up of six conventional core logics of strategy and juxtaposed the prescriptions of those logics with the unique characteristics identified. Finally, we constructed a research agenda consisting of a number of open questions based on our analysis to provide directions for future research in this area. The agenda suggests that fintech platform strategies have to account for competing institutional logics stemming from the platforms' dual identity and the tensions between conforming for legitimacy and differentiating for competitive advantage. There is also a need to account for an exceptionally dynamic and unpredictable regulatory landscape, as well as the responses and competitive actions of influential market incumbents.

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Section: Analysis and Discussionmentioning

confidence: 99%

The strategic options of fintech platforms: An overview and research agenda

Tan

Sun

et al. 2022

Information Systems Journal

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“…This implies that future technological advances would reduce the financial vulnerability risks of banks in QISMUT+3 countries. This finding is logical as enhanced financial technology would result in reduced credit risk and therefore financial vulnerability risk in the form of NPL (Zhang et al , 2020). This is because of the fact that fintech supplies bank management with greater information to be used efficiently in the decision-making process, resulting in a decline in loan losses (Pérez-Martín et al , 2018).…”

Section: Empirical Findingsmentioning

confidence: 99%

“…Likely, advances in fintech also reduce financial vulnerability risk for both subsamples. The result was predicted as such because technological enhancements, within the decision-making process, enable banks to decrease their credit risk exposure, meaning less financial vulnerability risk (Zhang et al , 2020; Ozili, 2021). When considering the SGR variables, a greater CC induces profitability for both Islamic and conventional banks.…”

Section: Empirical Findingsmentioning

confidence: 99%

Does social and governmental responsibility matter for financial stability and bank profitability? Evidence from commercial and Islamic banks

Kanapiyanova

Faizulayev

Ruzanov

et al. 2022

JIABR

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Purpose This paper aims to explore the drivers of banking stability in the case of QISMUT+3 countries (Qatar, Indonesia, Saudi Arabia, Malaysia, United Arab Emirates, Turkey, Pakistan, Kuwait and Bahrain) focusing on social and governmental responsibility (SGR) determinants. Both main indicators of banking stability, namely, profitability and nonperforming loans, were treated as dependent variables. The model is examined with the whole sample and separately by examining commercial banks and Islamic banks. Design/methodology/approach Cross-country bank-level panel data spanning from 2011 to 2018 is used. Two-step system generalized methods of moments alongside both panel-corrected standard error and feasible generalized least squares models were applied to ensure the robustness of the results. Findings Findings reveal that capital adequacy and corruption control are the most dominant determinants of banking profitability in the studied sample regardless of the type of the bank. In addition, profitability, efficient management, inflation and government effectiveness were found to be the main drivers of financial vulnerability risk. Practical implications Findings of this study offer many insights and policy implications to help stakeholders gain a comprehensive understanding of banking stability. Suggested policy implications targeting bank management, governmental policymakers and investors are offered to better the banking stability of QISMUT+3 countries. Originality/value This paper has multiple contributions to the existing literature. The determinants of banking stability are examined in QISMUT+3 group of countries which is the focus of a limited number of studies. In addition, the use of a comprehensive variable set alongside the addition of SGR determinants in the case of banking system stability is one of the main contributions of this paper.

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“…Financial institutions such as banks can use government R&D grants as a quality signal of a enterprise's R&D projects, so as to alleviate information asymmetry with these enterprises (Wu et al, 2021). The application of financial technology in commercial banks can also alleviate the pre-and post-loan risk associated with credit activities (Pan et al, 2021;Zhang et al, 2022). On the other hand, technology-based enterprises can also turn to external equity financing.…”

Section: Literature Reviewmentioning

confidence: 99%

THE EFFICIENCY OF FINANCING AND R&D IN TECHNOLOGY-BASED SMES AND IMPACT OF FINANCIAL REGULATION

Feng

Zhang

Chiu

et al. 2022

Technological and Economic Development of Economy

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Technological innovation is a long-term activity with highly unpredictable returns on investment, which makes SMEs with information problems and lack of collateral value be vulnerable to financing constraints when engaging in innovation activities. This study incorporates financing and R&D activities into the evaluation of innovation efficiency and further considers the impact of financial regulation as an external factor in technology-based SMEs in China. This study puts forward a three-stage dynamic DDF-DEA model to explore the overall innovation efficiency as well as the efficiency of each stage in technology-based SMEs by dividing the innovation process into three stages, namely the financing stage, R&D stage and operating stage. The study reveals that the overall efficiency of innovation are higher in non-coastal areas of China than in coastal areas. Non-coastal regions have higher efficiency in the financing and operating stages, while coastal regions have higher efficiency in the R&D stage. Strengthening financial regulation could improve the financing and R&D efficiency both in coastal and non-coastal areas, but it has different effect on the operating efficiency in coastal and non-coastal areas. The results of this study could provide some reference for China and other emerging economies to formulate policies in improving the efficiency of financing and R&D.

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How fintech impacts pre‐ and post‐loan risk in Chinese commercial banks

Cited by 44 publications

References 66 publications

The strategic options of fintech platforms: An overview and research agenda

The strategic options of fintech platforms: An overview and research agenda

Does social and governmental responsibility matter for financial stability and bank profitability? Evidence from commercial and Islamic banks

THE EFFICIENCY OF FINANCING AND R&D IN TECHNOLOGY-BASED SMES AND IMPACT OF FINANCIAL REGULATION

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