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Financial Industry Under Entrepreneurial Ecosystem: Internet Finance, Interest Rate Marketization, and Bank Performance

Financial Industry Under Entrepreneurial Ecosystem: Internet Finance, Interest Rate Marketization, and Bank Performance

Xiaomin Du, Xiangxiang Lang
Copyright: © 2020 |Pages: 16
ISBN13: 9781799834953|ISBN10: 1799834956|EISBN13: 9781799834977
DOI: 10.4018/978-1-7998-3495-3.ch006
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MLA

Du, Xiaomin, and Xiangxiang Lang. "Financial Industry Under Entrepreneurial Ecosystem: Internet Finance, Interest Rate Marketization, and Bank Performance." Sustainability in the Entrepreneurial Ecosystem: Operating Mechanisms and Enterprise Growth, edited by Yang Gao, et al., IGI Global, 2020, pp. 132-147. https://doi.org/10.4018/978-1-7998-3495-3.ch006

APA

Du, X. & Lang, X. (2020). Financial Industry Under Entrepreneurial Ecosystem: Internet Finance, Interest Rate Marketization, and Bank Performance. In Y. Gao, S. Tsai, X. Du, & C. Xin (Eds.), Sustainability in the Entrepreneurial Ecosystem: Operating Mechanisms and Enterprise Growth (pp. 132-147). IGI Global. https://doi.org/10.4018/978-1-7998-3495-3.ch006

Chicago

Du, Xiaomin, and Xiangxiang Lang. "Financial Industry Under Entrepreneurial Ecosystem: Internet Finance, Interest Rate Marketization, and Bank Performance." In Sustainability in the Entrepreneurial Ecosystem: Operating Mechanisms and Enterprise Growth, edited by Yang Gao, et al., 132-147. Hershey, PA: IGI Global, 2020. https://doi.org/10.4018/978-1-7998-3495-3.ch006

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Abstract

Due to the three functions of cost reduction, disintermediation, and information asymmetry, internet finance continues to impact the traditional banking business in the financial industry, posing a new competitive risk for commercial banks. In developing countries such as China, given the imperfect development of the financial market, the government needs to introduce a series of policies, but new policies will bring the risk of market uncertainty. Due to the double uncertainty of the market and the system in developing countries, commercial banks are caught between competitive and new policy risks. Therefore, exploring the impact of these two risks on the performance of commercial banks is very important to allow commercial banks to discern, resist, and respond to risks. This research uses the data of A-share listed banks for the past 10 years. Empirical research shows that internet finance and interest rate liberalization have a negative impact on bank performance. The liberalization of interest rates further increases the negative impact of internet finance on bank performance.

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