IDEAS home Printed from https://ideas.repec.org/a/taf/jocebs/v23y2025i2p165-190.html
   My bibliography  Save this article

Economic policy uncertainty and bank stability: the role of digitalization level

Author

Listed:
  • Qing Liu
  • Yuxia Fu
  • Chen Zhu

Abstract

This paper employs quarterly data from 102 Chinese commercial banks spanning from 2017Q1 to 2021Q3. Utilizing a panel fixed-effects model, we scrutinize the impact of digitization on the relationship between economic policy uncertainty and the stability of commercial banks. The main research conclusion is that a higher level of digitization can alleviate the negative effects of economic policy uncertainty on the stability of commercial banks. Further research indicates that digitization achieves this effect by improving borrower selection, reducing the cost of risk management, and enhancing profitability. The mitigating effect of digitization varies across different types of commercial banks, different time periods, and different external environments, with a stronger impact observed on state-owned banks, banks in the post-pandemic period, and banks operating in high external pressure environments. Our research results demonstrate for the first time how digitization enhances banks’ resilience to the impact of economic policy uncertainty, providing insights for financial stability and development.

Suggested Citation

  • Qing Liu & Yuxia Fu & Chen Zhu, 2025. "Economic policy uncertainty and bank stability: the role of digitalization level," Journal of Chinese Economic and Business Studies, Taylor & Francis Journals, vol. 23(2), pages 165-190, April.
  • Handle: RePEc:taf:jocebs:v:23:y:2025:i:2:p:165-190
    DOI: 10.1080/14765284.2024.2435226
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/14765284.2024.2435226
    Download Restriction: Access to full text is restricted to subscribers.

    File URL: https://libkey.io/10.1080/14765284.2024.2435226?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.

    More about this item

    Statistics

    Access and download statistics

    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:taf:jocebs:v:23:y:2025:i:2:p:165-190. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RCEA20 .

    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.