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Digital financial effect on risk-taking of small- and medium-sized commercial banks: Mediation through management costs

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  • Ge, Ji
  • Tang, Hairong
  • Dong, Yuzhe
  • Yang, Zongshang
  • Chen, Chen

Abstract

This study employs a dataset encompassing 145 small- and medium-sized commercial banks (SMCBs) from 2012 to 2022 to explore how digital finance impacts their risk-assuming conduct. Results indicate that advancing digital finance significantly reduces banks’ risk-taking activities. Furthermore, a disparity exists in the impact of digital financial development on risk-taking levels between urban and rural commercial banks. Furthermore, management costs act as an intermediary factor in the relationship between digital financial development and the risk-taking levels of SMCBs.

Suggested Citation

  • Ge, Ji & Tang, Hairong & Dong, Yuzhe & Yang, Zongshang & Chen, Chen, 2025. "Digital financial effect on risk-taking of small- and medium-sized commercial banks: Mediation through management costs," Finance Research Letters, Elsevier, vol. 77(C).
    • Handle: RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003721
    DOI: 10.1016/j.frl.2025.107109
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