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Fintech development and corporate credit risk: Evidence from an emerging market

Author

Listed:
  • Tan, Changchun
  • Mo, Lingyu
  • Wu, Xiaomeng
  • Zhou, Peng

Abstract

This paper analyzes the impact of fintech development on the credit risk of non-financial firms. Using the city-level fintech development index constructed based on data from Ant Finance Service Group, we find that: (1) non-financial firms in cities with better fintech services have lower credit risk; (2) two channels identified are financial constraints and corporate investment efficiency; (3) the role of fintech development in reducing corporate credit risk are more pronounced for non-state-owned firms, small and medium-sized firms, firms in regions with a lower level of marketization, and firms experiencing economic contraction. Our research provides implications for the development of fintech in an emerging market.

Suggested Citation

  • Tan, Changchun & Mo, Lingyu & Wu, Xiaomeng & Zhou, Peng, 2024. "Fintech development and corporate credit risk: Evidence from an emerging market," International Review of Financial Analysis, Elsevier, vol. 92(C).
    • Handle: RePEc:eee:finana:v:92:y:2024:i:c:s1057521924000164
    DOI: 10.1016/j.irfa.2024.103084
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    More about this item

    Keywords

    Fintech development; Credit risk; Non-financial firms; Financial constraints; Corporate investment efficiency;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G33 - Financial Economics - - Corporate Finance and Governance - - - Bankruptcy; Liquidation

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