Financial technology, macroeconomic uncertainty, and commercial banks' proactive risk-taking in China

In this paper, we collect the annual data of 145 commercial banks in China from 2010 to 2019 and use a panel data fixed-effect model to study how fintech (financial technology) affects the influence of macroeconomic uncertainty on commercial banks' proactive risk-taking. We find that the development of fintech mitigates the dampening effect of macroeconomic uncertainty on commercial banks' proactive risk-taking. Specifically, fintech plays a mitigating role by motivating commercial banks to issue loans and hold transactional financial assets. With the increase of commercial banks’ proactive risk-taking, the mitigation effect of fintech monotonically diminishes. This mitigating effect is heterogeneous across different types of commercial banks, as it is relatively weak for banks with high capital adequacy ratios and large state-owned banks.