Seminario Zijia Huang

Zijia Huang (Universidad Autónoma de Madrid) will present her paper “Fintech development and credit risk in the Chinese banking industry: Mechanisms and heterogeneities” (joint with Pablo de Andrés and Nuria Suárez, Universidad Autónoma de Madrid). 

The invited speaker is interested in a tenure-track job in the department (Area: Accounting).

Abstract

This paper explores the impact of FinTech development on bank credit risk using data from 98 Chinese commercial banks during the 2016-2020 period. Using a web crawler technology and entropy method, we construct an index that measures the level of banks’ FinTech-related disclosure in their annual reports as a proxy for FinTech development. Our empirical findings show that FinTech development contributes to reduce bank credit risk and that the increase in the level of bank efficiency acts as a mechanism. The results show that the effect is shaped by the characteristics of each bank in terms of size, efficiency, diversification, leverage and according to its listed/non-listed condition. Notably, FinTech disclosure plays a more pronounced role in reducing credit risk in regions with lower GDP levels and limited provincial FinTech-related disclosure. Our results are robust to different specifications of econometric models and alternative empirical methods considering potential endogeneity and reverse causality.