IDEAS home Printed from https://ideas.repec.org/a/kap/ecopln/v56y2023i6d10.1007_s10644-023-09560-2.html
   My bibliography  Save this article

Can digital transformation reduce bank systemic risk? Empirical evidence from listed banks in China

Author

Listed:
  • Ting Yao

    (Nanning Normal University)

  • Liangrong Song

    (University of Shanghai for Science and Technology)

Abstract

Digital transformation (DT) is a strategic priority for commercial banks in China. It is important to explore the relationship between DT and bank systemic risk to maintain financial stability and promote high-quality development of banks. Based on the data of China's listed commercial banks from Q3 2010 to Q1 2022, this paper empirically tests the influence mechanism, heterogeneity influence and action channels of DT on bank systemic risk. This paper finds that DT reduces the bank systemic risk. The higher the degree of DT, the lower the bank systemic risk. Innovation effect and cost effect play multiple mediating roles in the reduction of bank systemic risk by DT. The innovation of bank products, sales channels, organizations and other aspects to enhance the competitiveness and income of banks, while reducing the information asymmetry between the supply chain and the industrial chain, taking cost and risk sharing, reduces the bank systemic risk. This paper enriches the research on the impact of bank DT on systemic risk and provides empirical support for bank risk management.

Suggested Citation

  • Ting Yao & Liangrong Song, 2023. "Can digital transformation reduce bank systemic risk? Empirical evidence from listed banks in China," Economic Change and Restructuring, Springer, vol. 56(6), pages 4445-4463, December.
    • Handle: RePEc:kap:ecopln:v:56:y:2023:i:6:d:10.1007_s10644-023-09560-2
    DOI: 10.1007/s10644-023-09560-2
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s10644-023-09560-2
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s10644-023-09560-2?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Dogah, Kingsley E., 2021. "Effect of trade and economic policy uncertainties on regional systemic risk: Evidence from ASEAN," Economic Modelling, Elsevier, vol. 104(C).
    2. Xu, Qifa & Jin, Bei & Jiang, Cuixia, 2021. "Measuring systemic risk of the Chinese banking industry: A wavelet-based quantile regression approach," The North American Journal of Economics and Finance, Elsevier, vol. 55(C).
    3. Baumöhl, Eduard & Bouri, Elie & Hoang, Thi-Hong-Van & Hussain Shahzad, Syed Jawad & Výrost, Tomáš, 2022. "Measuring systemic risk in the global banking sector: A cross-quantilogram network approach," Economic Modelling, Elsevier, vol. 109(C).
    4. Ting Yao & Liangrong Song, 2021. "Examining the differences in the impact of Fintech on the economic capital of commercial banks’ market risk: evidence from a panel system GMM analysis," Applied Economics, Taylor & Francis Journals, vol. 53(23), pages 2647-2660, May.
    5. Khattak, Mudeer Ahmed & Ali, Mohsin & Azmi, Wajahat & Rizvi, Syed Aun R., 2023. "Digital transformation, diversification and stability: What do we know about banks?," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 122-132.
    6. Liu, Ruicheng & Pun, Chi Seng, 2022. "Machine-Learning-enhanced systemic risk measure: A Two-Step supervised learning approach," Journal of Banking & Finance, Elsevier, vol. 136(C).
    7. Bakkar, Yassine & Nyola, Annick Pamen, 2021. "Internationalization, foreign complexity and systemic risk: Evidence from European banks," Journal of Financial Stability, Elsevier, vol. 55(C).
    8. Tadiwanashe Muganyi & Linnan Yan & Yingkai Yin & Huaping Sun & Xiangbin Gong & Farhad Taghizadeh-Hesary, 2022. "Fintech, regtech, and financial development: evidence from China," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 8(1), pages 1-20, December.
    9. Chwiłkowska-Kubala, Anna & Cyfert, Szymon & Malewska, Kamila & Mierzejewska, Katarzyna & Szumowski, Witold, 2023. "The impact of resources on digital transformation in energy sector companies. The role of readiness for digital transformation," Technology in Society, Elsevier, vol. 74(C).
    10. Jui-Long Hung & Binjie Luo, 2016. "FinTech in Taiwan: a case study of a Bank’s strategic planning for an investment in a FinTech company," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 2(1), pages 1-16, December.
    11. Gupta, Aparna & Wang, Runzu & Lu, Yueliang, 2021. "Addressing systemic risk using contingent convertible debt – A network analysis," European Journal of Operational Research, Elsevier, vol. 290(1), pages 263-277.
    12. Lai, Yujie & Hu, Yibo, 2021. "A study of systemic risk of global stock markets under COVID-19 based on complex financial networks," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 566(C).
    13. Murinde, Victor & Rizopoulos, Efthymios & Zachariadis, Markos, 2022. "The impact of the FinTech revolution on the future of banking: Opportunities and risks," International Review of Financial Analysis, Elsevier, vol. 81(C).
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Campanella, Francesco & Serino, Luana & Battisti, Enrico & Giakoumelou, Anastasia & Karasamani, Isabella, 2023. "FinTech in the financial system: Towards a capital-intensive and high competence human capital reality?," Journal of Business Research, Elsevier, vol. 155(PA).
    2. Rui Ai & Yuhang Zheng & Serhat Yüksel & Hasan Dinçer, 2023. "Investigating the components of fintech ecosystem for distributed energy investments with an integrated quantum spherical decision support system," Financial Innovation, Springer;Southwestern University of Finance and Economics, vol. 9(1), pages 1-28, December.
    3. Guo, Junyan & Fang, Hanqing & Liu, Xuexin & Wang, Cizhi & Wang, Yuan, 2023. "FinTech and financing constraints of enterprises: Evidence from China," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 82(C).
    4. Wang, Yi-Ran & Ma, Chao-Qun & Ren, Yi-Shuai, 2022. "A model for CBDC audits based on blockchain technology: Learning from the DCEP," Research in International Business and Finance, Elsevier, vol. 63(C).
    5. Umara Noreen & Attayah Shafique & Zaheer Ahmed & Muhammad Ashfaq, 2023. "Banking 4.0: Artificial Intelligence (AI) in Banking Industry & Consumer’s Perspective," Sustainability, MDPI, vol. 15(4), pages 1-16, February.
    6. Dai, Zhifeng & Tang, Rui & Zhang, Xiaotong, 2023. "A new multilayer network for measuring interconnectedness among the energy firms," Energy Economics, Elsevier, vol. 124(C).
    7. Dai, Zhifeng & Tang, Rui & Zhang, Xinhua, 2023. "Multilayer network analysis for measuring the inter-connectedness between the oil market and G20 stock markets," Energy Economics, Elsevier, vol. 120(C).
    8. Yelena Popova & Olegs Cernisevs, 2022. "Smart City: Sharing of Financial Services," Social Sciences, MDPI, vol. 12(1), pages 1-17, December.
    9. Mensi, Walid & Al Rababa'a, Abdel Razzaq & Vo, Xuan Vinh & Kang, Sang Hoon, 2021. "Asymmetric spillover and network connectedness between crude oil, gold, and Chinese sector stock markets," Energy Economics, Elsevier, vol. 98(C).
    10. Bonaccolto, Giovanni & Caporin, Massimiliano & Maillet, Bertrand B., 2022. "Dynamic large financial networks via conditional expected shortfalls," European Journal of Operational Research, Elsevier, vol. 298(1), pages 322-336.
    11. Zhao, Yang & Goodell, John W. & Dong, Qingli & Wang, Yong & Abedin, Mohammad Zoynul, 2022. "Overcoming spatial stratification of fintech inclusion: Inferences from across Chinese provinces to guide policy makers," International Review of Financial Analysis, Elsevier, vol. 84(C).
    12. Silva, Thiago Christiano & Dias, Felipe A.M. & dos Reis, Vinicius E. & Tabak, Benjamin M., 2022. "The role of network topology in competition and ticket pricing in air transportation: Evidence from Brazil," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 601(C).
    13. Naeem, Muhammad Abubakr & Yousaf, Imran & Karim, Sitara & Yarovaya, Larisa & Ali, Shoaib, 2023. "Tail-event driven NETwork dependence in emerging markets," Emerging Markets Review, Elsevier, vol. 55(C).
    14. Son, Bumho & Jang, Huisu, 2023. "Economics of blockchain-based securities settlement," Research in International Business and Finance, Elsevier, vol. 64(C).
    15. Mo, Wan-Shin & Yang, J. Jimmy & Chen, Yu-Lun, 2023. "Exchange rate spillover, carry trades, and the COVID-19 pandemic," Economic Modelling, Elsevier, vol. 121(C).
    16. Pacelli, Vincenzo & Miglietta, Federica & Foglia, Matteo, 2022. "The extreme risk connectedness of the new financial system: European evidence," International Review of Financial Analysis, Elsevier, vol. 84(C).
    17. Ur Rehman, Mobeen & Al Rababa'a, Abdel Razzaq & El-Nader, Ghaith & Alkhataybeh, Ahmad & Vo, Xuan Vinh, 2022. "Modelling the quantile cross-coherence between exchange rates: Does the COVID-19 pandemic change the interlinkage structure?," Journal of International Financial Markets, Institutions and Money, Elsevier, vol. 76(C).
    18. Tang, Qihe & Tong, Zhiwei & Xun, Li, 2022. "Insurance risk analysis of financial networks vulnerable to a shock," European Journal of Operational Research, Elsevier, vol. 301(2), pages 756-771.
    19. Dai, Zhifeng & Zhu, Haoyang, 2023. "Dynamic risk spillover among crude oil, economic policy uncertainty and Chinese financial sectors," International Review of Economics & Finance, Elsevier, vol. 83(C), pages 421-450.
    20. Yan, Chun & Ding, Yi & Liu, Wei & Liu, Xinhong & Liu, Jiahui, 2023. "Multilayer interbank networks and systemic risk propagation: Evidence from China," Physica A: Statistical Mechanics and its Applications, Elsevier, vol. 628(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:ecopln:v:56:y:2023:i:6:d:10.1007_s10644-023-09560-2. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.