Coupling Degree Evaluation of China’s Internet Financial Ecosystem Based on Entropy Method and Principal Component Analysis

Zhou Rongxi (), Xiong Yahui (), Wang Ning () and Wang Xizu ()
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Zhou Rongxi: School of Banking and Finance, University of International Business and Economics, Beijing, 100029, China
Xiong Yahui: School of Banking and Finance, University of International Business and Economics, Beijing, 100029, China
Wang Ning: School of Banking and Finance, University of International Business and Economics, Beijing, 100029, China
Wang Xizu: School of Banking and Finance, University of International Business and Economics, Beijing, 100029, China

Journal of Systems Science and Information, 2019, vol. 7, issue 5, 399-421

Abstract: This paper attempts to evaluate the coordinated development state of the subsystems within the internet financial ecosystem in China from 2011 to 2016. Focusing on the main business modes, technological innovation, and the external environment, we select 29 indicators to construct an index system and adopt a coupling coordination degree model for evaluation. Furthermore, we use two weight calculation methods, entropy weight and principal component analysis, to ensure the robustness of the results. The empirical results show that China’s internet financial ecosystem experienced five development stages from 2011 to 2016, which are moderate disorder, near disorder, weak coordination, intermediate coordination, and good coordination. Different methods of obtaining weights have little effect on the empirical results. These findings suggest that at the beginning, the coordinated development of China’s internet financial ecosystem was hindered by factors including the scarcity of main business modes and the defect of technological innovation; then, with the rapid development of China’s internet industry, the external environment became another drawback in coordinated development. Finally, based on the findings, we give some policy recommendations from a global perspective to achieve a sustainable internet financial ecosystem.

Keywords: internet finance; financial ecosystem; entropy method; principal component analysis; coupling degree evaluation (search for similar items in EconPapers)
Date: 2019
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Persistent link: https://EconPapers.repec.org/RePEc:bpj:jossai:v:7:y:2019:i:5:p:399-421:n:1

DOI: 10.21078/JSSI-2019-399-23

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