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

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

Finance Research Letters, 2025, vol. 77, issue C

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.

Keywords: Digital finance; Risk-taking; Small and medium commercial banks; Threshold effect (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:77:y:2025:i:c:s1544612325003721

DOI: 10.1016/j.frl.2025.107109

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