Research on the Impact of Digital Finance on the Non-performing Loan Ratio of Chinese Commercial Banks: Empirical Evidence from the Provincial Level

Shan Li

doi:10.54691/bcpbm.v29i.2277

Authors

Shan Li

DOI:

https://doi.org/10.54691/bcpbm.v29i.2277

Keywords:

digital finance, non-performing loan ratio of commercial banks, panel data, fixed effect

Abstract

As an efficient and convenient means, digital finance has penetrated into all aspects of production and life, and also has an impact on the stability of the financial system. In order to explore the impact of China's digital finance on the non-performing loan ratio of commercial banks, this paper uses panel data from 30 provinces from 2011 to 2019, and uses a fixed-effect model to explore the impact of digital finance on the non-performing loan ratio and regional differences. Research shows that there is a negative relationship between digital finance and the non-performing loan ratio of commercial banks. Further research finds that various dimensions of digital finance have different effects on the non-performing loan ratio of commercial banks. Specifically, the significance of the depth of use is greater than that of the degree of digitization, while the inhibitory effect of the breadth of coverage is not yet obvious. In addition, due to the uneven economic development in regions, the impact of digital finance on the non-performing loan ratio of commercial banks has regional heterogeneity, and the inhibitory effect of digital finance is more obvious in regions with higher economic development levels.

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