TITLE:
Digital Transformation of Commercial Banks, Monetary Policy Transmission Efficiency and SME Financing: Empirical Evidence from the Chinese Market
AUTHORS:
Rusha Deng
KEYWORDS:
Digital Transformation, Monetary Policy, Bank Risk-Taking, SME Financing
JOURNAL NAME:
Modern Economy,
Vol.14 No.7,
July
26,
2023
ABSTRACT: Using the data of SMEs in Chinese market from 2010 to 2021 as research
samples, this paper focuses on the impact of commercial banks’ digital transformation
on the transmission efficiency of monetary policy to SME financing and the role
of banks’ risk-taking. The results show that the digital transformation of
commercial banks can significantly improve the transmission efficiency of
monetary policy to SME financing, and promote SMEs’ bank loan supply and loan
interest rate to adapt to the objectives of monetary policy regulation.
Heterogeneity test shows that the impact of digital transformation of
commercial banks on the transmission efficiency of monetary policy presents
heterogeneity among enterprises with different property rights and growth
characteristics and regions with different marketization degrees and financial development levels. Moreover, the
strengthening effect on the transmission efficiency of monetary policy
is more obvious in private enterprises, high-growth enterprises, enterprises in
areas with higher degree of marketization and enterprises in areas with lower
level of financial development. The transmission channel test shows that the
strengthening effect of the digital transformation of commercial banks on the
transmission efficiency of monetary policy is realized by influencing the
risk-taking of banks. The findings remain robust after replacing key
explanatory variables, adjusting model estimation methods, and controlling for
the influence of financial development level. The research conclusions of this
paper have important policy implications for promoting the digital
transformation of commercial banks and improving the transmission efficiency of
monetary policy, so as to promote the digital transformation of commercial
banks to better alleviate SMEs’ financing problems.