IDEAS home Printed from https://ideas.repec.org/h/spr/advbcp/978-94-6463-835-6_86.html

Research on the Regional Impact of Digital Inclusive Finance Development on the Profitability of Commercial Banks

In: Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025)

Author

Listed:
  • Shuolei Wu

    (Tianjin University of Science and Technology)

  • Xinrui Ma

    (Tianjin University of Science and Technology)

Abstract

Based on panel data from 42 listed commercial banks in China from 2011 to 2023, this paper empirically analyzes the impact of digital finance on the profitability of commercial banks using a two-way fixed effects model. With return on total assets (ROA) as the explained variable, the digital inclusive finance index as the core explanatory variable, and controlling for factors such as capital adequacy ratio, bank size, loan-to-deposit ratio and non-performing loan ratio. The study found that the development of digital finance has a significant negative impact on the profitability of commercial banks. For every 1-unit increase in the digital inclusive finance index, ROA drops by approximately 0.17 percent, and this effect is particularly significant in public banks and the eastern region. The capital adequacy ratio and the loan-to-deposit ratio have a positive effect on profitability, while the non-performing loan ratio significantly suppresses profitability. Heterogeneity analysis shows that state-owned banks are less sensitive to digital financial shocks, while the impact in the central and western regions fails to pass the significance test due to insufficient penetration of inclusive finance. The robustness test verified the reliability of the conclusion by replacing the explained variable (ROE) with the lag model. Based on this, it is recommended that commercial banks deepen digital transformation to optimize operational efficiency, improve capital replenishment and risk management mechanisms, and adopt differentiated strategies to address the challenges of regional and attribute heterogeneity.

Suggested Citation

  • Shuolei Wu & Xinrui Ma, 2025. "Research on the Regional Impact of Digital Inclusive Finance Development on the Profitability of Commercial Banks," Advances in Economics, Business and Management Research, in: Barbara Siuta-Tokarska & Adriana Grigorescu & Md. Mamun Habib & Yifeng Zhu (ed.), Proceedings of the 2025 3rd International Academic Conference on Management Innovation and Economic Development (MIED 2025), pages 820-831, Springer.
    • Handle: RePEc:spr:advbcp:978-94-6463-835-6_86
    DOI: 10.2991/978-94-6463-835-6_86
    as

    Download full text from publisher

    To our knowledge, this item is not available for download. To find whether it is available, there are three options:
    1. Check below whether another version of this item is available online.
    2. Check on the provider's web page whether it is in fact available.
    3. Perform a
    for a similarly titled item that would be available.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;

    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:spr:advbcp:978-94-6463-835-6_86. 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: 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.