Does the digital transformation of banks affect green credit?

•Digital transformation of banks has a positive impact on the green credit scale.•A higher level of bank management digitization is more effective for the growth of green credit.•Banks’ digital transformation boosts green credit scale by exogenous fintech and industry competition.•The facilitating e...

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Bibliographic Details
Published in:Finance research letters 2023-12, Vol.58, p.104394, Article 104394
Main Authors: Shang, Xiaoting, Niu, Huayong
Format: Article
Language:English
Subjects:
Banking digitalization
Exogenous fintech
Green credit
Industry competition
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Summary:•Digital transformation of banks has a positive impact on the green credit scale.•A higher level of bank management digitization is more effective for the growth of green credit.•Banks’ digital transformation boosts green credit scale by exogenous fintech and industry competition.•The facilitating effect is more obvious under the influence of state-owned banks, large banks, loose monetary policy, and strong financial supervision. This study explores the relationship between digital transformation and green credit in the banking industry. Based on data from China’s banks from 2010 to 2021, we find that the digital transformation of banks has a positive impact on the green credit scale. Among them, the higher level of bank management digitization is more effective for green credit growth. From the perspective of cooperation and competition banks’ digitization contribute to green credit through exogenous fintech and industry competition. In addition, the facilitating effect of the relationship is more pronounced under state-owned banks, large banks, loose monetary policy, and strong financial supervision.
ISSN:1544-6123
1544-6131
DOI:10.1016/j.frl.2023.104394