Advances in Economics, Management and Political Sciences

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Proceedings of the 2nd International Conference on Financial Technology and Business Analysis

Series Vol. 73 , 05 March 2024


Open Access | Article

Does Fintech Investment in Commercial Banks Improve Business Performance? -- Based on the Empirical Test of 42 Listed Commercial Banks in China from 2010 to 2022

Zixuan Li * 1
1 The University of Sydney

* Author to whom correspondence should be addressed.

Advances in Economics, Management and Political Sciences, Vol. 73, 168-181
Published 05 March 2024. © 2023 The Author(s). Published by EWA Publishing
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited.
Citation Zixuan Li. Does Fintech Investment in Commercial Banks Improve Business Performance? -- Based on the Empirical Test of 42 Listed Commercial Banks in China from 2010 to 2022 . AEMPS (2024) Vol. 73: 168-181. DOI: 10.54254/2754-1169/73/20231720.

Abstract

This article aims to empirically examine the impact of internal fintech investment on operational performance using both a two-way fixed effects model and a mediation effect model. Take banks in China as research target. Through manually collected unbalanced panel data from 42 listed commercial banks spanning the years from 2010 to 2022. The key findings are as follows. First, investments in fintech significantly enhance the operational performance of banks. However, compared to state-owned banks and share-owned banks, the positive effect of fintech investments on the performance of urban commercial banks and rural commercial banks is more significant. Secondly, mediation tests on operational costs and business scope channels have revealed that fintech could achieve "cost reduction and efficiency enhancement" for urban and rural commercial banks by enhancing operational efficiency and expanding their business scope. Nonetheless, this effect is not significantly evident in state-owned banks and share-owned banks. Thirdly, further empirical testing on market share indicates that fintech investments significantly boost the market share of joint-stock commercial banks, corroborating the notion that fintech could augment the competitiveness of commercial banks. The insights garnered from this study contribute to understanding and augmenting existing research on the microeconomic consequences of the strategic fintech investment undertaken by commercial banks. Furthermore, it offers valuable references for future policies aimed at propelling the digital transformation of traditional banking industries.

Keywords

Financial technology, Commercial banks, Business performance, Influence channels, Mediating effect

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Data Availability

The datasets used and/or analyzed during the current study will be available from the authors upon reasonable request.

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Volume Title
Proceedings of the 2nd International Conference on Financial Technology and Business Analysis
ISBN (Print)
978-1-83558-319-7
ISBN (Online)
978-1-83558-320-3
Published Date
05 March 2024
Series
Advances in Economics, Management and Political Sciences
ISSN (Print)
2754-1169
ISSN (Online)
2754-1177
DOI
10.54254/2754-1169/73/20231720
Copyright
© 2023 The Author(s)
Open Access
This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license, which permits unrestricted use, distribution, and reproduction in any medium, provided the original work is properly cited

Copyright © 2023 EWA Publishing. Unless Otherwise Stated