Uncovering the mystery of China’s success in FinTech: A perspective from political connections
Prof. Xuanli Xie
National School of Development
Peking University
Date: 15 January 2025 (Wednesday)
Time: 10:30 to 12:00
Venue: E22-G008
Host: Prof. Tianyou Hu, Assistant Professor in Management
Abstract
This study aims to uncover the driving forces underlying the rapid development of FinTech in China. Exploiting the announcement of FinTech-related national policies in 2015 as a plausibly exogenous shock, we find that politically connected banks engage in FinTech adoption in a more active manner than non-connected counterparts after 2015, manifested as more mentions of FinTech-related activities in their annual reports and more applications of FinTech-related patents. The positive role of political connections in improving FinTech adoption is primarily driven by banks headquartered in cities with no mayor or municipal party secretary investigated during the anti-corruption campaign. In addition, political connections appear to have heterogeneous effects on FinTech adoption between state banks and non-state banks. Last, we examine the economic consequences of FinTech adoption and find that FinTech adoption lowers the likelihood of a bank receiving administrative punishments and lowers banks’ expenses on employees, especially for politically connected banks.
Speaker
Prof. Xuanli Xie is Boya Young Scholar and Research Associate Professor at National School of Development, Peking University. She is also a Senior Research Fellow and the Research Directors at Institute of Digital Finance, Peking University. She received her PhD in strategic management from the University of North Carolina at Chapel Hill, and her M.A. and B.A. from Peking University. Her research interests include entrepreneurship, corporate governance, innovation and international business. Her papers have been published in top tier Chinese and international journals such as Strategic Management Journal, Organization Science, Journal of International Business Studies, Journal of Business Venturing and Strategic Entrepreneurship Journal. She teaches entrepreneurship and strategy courses to MBA, PhD and undergraduate students.
All are welcome!
