Work

Digital financial development and commercial bank stability

Year: 2024

Type: article

Abstract: In today's economically globalized and rapidly evolving IT landscape, digital finance has emerged as a key driver in the financial sector. This research evaluates the stability of commercial banks by analyzing their profitability and risk-taking capacity, while also exploring the effects of digital financial development (DFD) on this stability. The outcomes suggest that DFD enhances both profitability and risk-taking capacity of commercial banks, ultimately strengthening their overall stability. Notably, operational efficiency plays a facilitating role in this process. Additionally, the study uncovers regional and size-based differences in the impact of DFD on commercial bank stability. Upon conducting robustness and endogeneity checks, the findings remain consistent, affirming the universal applicability and credibility of digital finance in bolstering commercial bank stability. These discoveries provide essential theoretical support and practical advice for strategic planning and policy-making in the digital finance era for commercial banks.

Source: International Review of Economics & Finance

DOI: 10.1016/j.iref.2024.103749

Authors: Yixin Liang, Ran Wei, Dingkang Duan

Institutions: The University of Sydney, China University of Geosciences (Beijing), China University of Geosciences

Language: English

Topic: FinTech, Crowdfunding, Digital Finance

Subfield: Management Information Systems

Field: Business, Management and Accounting

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: hybrid

Estimated APC paid: $2,790