Will Off-Balance-Sheet Business Innovation Affect Bank Risk-Taking under the Background of Financial Technology?
Round 1
Reviewer 1 Report
This paper attempted to investigate the relationship between off-balance sheet business innovation and Bank Risk Taking and the mediation roles of Bank Agency Cost and Internal Control Quality, and the moderating role of Bank Competition. The paper seems interesting. I have a few comments which could be useful in enhancing the quality of the paper.
1. What are the motivations behind the paper? How does this paper address research gaps? If so, there will be a contribution.
2. Panel unit root and diagnostic test of each model should be included.
3. There was no mention of hypotheses in the discussion of the result. How the empirical results of this study are similar and dissimilar to the past literature In sum, the empirical results discussion part is poorly written.
4. while policy recommendations, one should discuss why recommending such.
Author Response
This paper attempted to investigate the relationship between off-balance sheet business innovation and Bank Risk Taking and the mediation roles of Bank Agency Cost and Internal Control Quality, and the moderating role of Bank Competition. The paper seems interesting. I have a few comments which could be useful in enhancing the quality of the paper.
Response to the reviewer:
We thank the reviewer for devoting valuable time and giving us valuable insights to improve the manuscript. We found them very useful in improving our manuscript. We have revised the manuscript according to the suggestion of the reviewer. All changes are highlighted in yellow color.
Comment # 1
What are the motivations behind the paper? How does this paper address research gaps? If so, there will be a contribution.
Response to the reviewer:
We are sorry for our less motivated writing in the previous draft. We have supplemented the research motivation and incremental contribution. The modifications in the paper are on page 2; the specific modifications are made in the third and fourth paragraphs of the introduction section.
Comment # 2
Panel unit root and diagnostic test of each model should be included.
Response to the reviewer:
Unit root inspection is generally applicable to long panels. In general, T>=20 is more suitable for the unit root test; the sample period of this study is 11 years. In addition, research indicators in the financial field usually involve some financial ratios, and time series data of such financial ratios generally do not have unit roots. To ensure the reliability of empirical results, we supplemented the unit root test after descriptive statistics. The unit root test results are in table 6 in the revised manuscript. The result showed that at the 10% significance level, the statistical values of the series are less than the critical value, and the p values are less than 0.05, so there is no unit root, and the series are stationary time series.
Comment # 3
There was no mention of hypotheses in the discussion of the result. How the empirical results of this study are similar and dissimilar to the past literature in sum, the empirical results discussion part is poorly written.
Response to the reviewer:
We are thankful for highlighting this important aspect. This study adds some hypotheses information to the empirical test results, including the statistical and economic implications of empirical results. The modifications in the paper are on pages 3-4; the specific changes are in sections 4.1 to 4.3.
Comment # 4
while policy recommendations, one should discuss why recommending such.
Response to the reviewer:
Thanks for the reviewer’s comments. This paper modifies the research conclusion and attempts to make a one-to-one correspondence between the research conclusions and policy recommendations. The modifications to the paper are on pages 19-20; the specific changes are in section 5, Conclusions and Recommendations.
Reviewer 2 Report
Paper analyzed the relationship between off-balance sheet business innovation and bank risk taking in Chinese commercial banks. Topic and interesting and up-to-date.
The motivation and reasoning for the study was done correctly.
I suggest extending the review of the literauture, in particular with the most up-to-date position:
Hasanul Banna, M. Kabir Hassan, Mamunur Rashid, Fintech-based financial inclusion and bank risk-taking: Evidence from OIC countries, Journal of International Financial Markets, Institutions and Money, Volume 75, 2021, 101447, ISSN 1042-4431, https://doi.org/10.1016/j.intfin.2021.101447.
I. Marcelin, W. Sun, M. Teclezion, E. Junarsin, Financial inclusion and bank risk-taking: the effect of information sharing, Finance Research Letters, Volume 50, 2022, 103182, ISSN 1544- 6123, https://doi.org/10.1016/j.frl.2022.103182.
Banna, H. The role of digital financial inclusion on promoting sustainable economic growth through banking stability: evidence from Bangladesh (2020) Development Review, 29 (2020), pp. 19 - 36.
Mohd Javaid, Abid Haleem, Ravi Pratap Singh, Rajiv Suman, Shahbaz Khan, A review of Blockchain Technology applications for financial services,
BenchCouncil Transactions on Benchmarks, Standards and Evaluations, 2022, 100073, ISSN 2772-4859, https://doi.org/10.1016/j.tbench.2022.100073.
Lee-Ying Tay, Hen-Toong Tai, Gek-Siang Tan, Digital financial inclusion: A gateway to sustainable development, Heliyon, Volume 8, Issue 6, 2022, e09766, ISSN 2405-8440, https://doi.org/10.1016/j.heliyon.2022.e09766.
Xiangrui Chao, Qin Ran, Jia Chen, Tie Li, Qian Qian, Daji Ergu, Regulatory technology (Reg-Tech) in financial stability supervision: Taxonomy, key methods, applications and future directions, International Review of Financial Analysis, Volume 80, 2022, 102023, ISSN 1057-5219, https://doi.org/10.1016/j.irfa.2022.102023.
The hypotheses have been set correctly and the way they have been proven is adequate.
The research method and data used have been well utilised.
I would suggest more elaboration in the interpretation of the results and reference to other authors' studies.
In conclusion, it would be appropriate to point out the limitations accompanying the conduct of the study and the practical implications
Author Response
Reviewer 2
Comment # 1
Paper analyzed the relationship between off-balance sheet business innovation and bank risk taking in Chinese commercial banks. Topic and interesting and up-to-date.
Response to the reviewer:
We thank the reviewer for devoting valuable time and giving us valuable insights to improve the manuscript. We found them very useful in improving our manuscript. We have revised the manuscript according to the suggestion of the reviewer. All changes are highlighted in yellow color.
Comment # 2
The motivation and reasoning for the study was done correctly.
Response to the reviewer:
We are thankful for the encouraging comment.
Comment # 3
I suggest extending the review of the literauture, in particular with the most up-to-date position:
Hasanul Banna, M. Kabir Hassan, Mamunur Rashid, Fintech-based financial inclusion and bank risk-taking: Evidence from OIC countries, Journal of International Financial Markets, Institutions and Money, Volume 75, 2021, 101447, ISSN 1042-4431, https://doi.org/10.1016/j.intfin.2021.101447.
- Marcelin, W. Sun, M. Teclezion, E. Junarsin, Financial inclusion and bank risk-taking: the effect of information sharing, Finance Research Letters, Volume 50, 2022, 103182, ISSN 1544- 6123, https://doi.org/10.1016/j.frl.2022.103182.
Banna, H. The role of digital financial inclusion on promoting sustainable economic growth through banking stability: evidence from Bangladesh (2020) Development Review, 29 (2020), pp. 19 - 36.
Mohd Javaid, Abid Haleem, Ravi Pratap Singh, Rajiv Suman, Shahbaz Khan, A review of Blockchain Technology applications for financial services,
BenchCouncil Transactions on Benchmarks, Standards and Evaluations, 2022, 100073, ISSN 2772-4859, https://doi.org/10.1016/j.tbench.2022.100073.
Lee-Ying Tay, Hen-Toong Tai, Gek-Siang Tan, Digital financial inclusion: A gateway to sustainable development, Heliyon, Volume 8, Issue 6, 2022, e09766, ISSN 2405-8440, https://doi.org/10.1016/j.heliyon.2022.e09766.
Xiangrui Chao, Qin Ran, Jia Chen, Tie Li, Qian Qian, Daji Ergu, Regulatory technology (Reg-Tech) in financial stability supervision: Taxonomy, key methods, applications and future directions, International Review of Financial Analysis, Volume 80, 2022, 102023, ISSN 1057-5219, https://doi.org/10.1016/j.irfa.2022.102023.
Response to the reviewer:
Thanks for the reviewer’s comments. The literature recommended by the reviewer is added to the literature review section of this paper. At the end of the article, the references are also added accordingly. The modifications in the paper are on pages 3-4; the specific modifications are in section 2.1
Comment # 4
The hypotheses have been set correctly and the way they have been proven is adequate.
Response to the reviewer:
Thanks for your appreciation.
Comment # 5
The research method and data used have been well utilised.
Response to the reviewer:
Thanks for your agreeableness.
Comment # 6
I would suggest more elaboration in the interpretation of the results and reference to other authors’ studies.
Response to the reviewer:
Thanks for the reviewer’s comments. This study elaborates on interpreting the empirical test results, including the statistical and economic implications of empirical results. The modifications are in the paper; the specific changes are in sections 4.1 to 4.3.
Comment # 6
In conclusion, it would be appropriate to point out the limitations accompanying the conduct of the study and the practical implications
Response to the reviewer:
Thanks for the reviewer’s comments. This paper adds some discussion about the limitations accompanying the conduct of the study and the practical implications. The modifications in the paper are on page 20; the specific modifications are in the last paragraph of the conclusion.
Round 2
Reviewer 1 Report
The current version has substantially improved, and the authors have addressed my comments in the revised version.
All the best!
Author Response
Reviewers’ Comment
The current version has substantially improved, and the authors have addressed my comments in the revised version.
All the best!
Response to the reviewer
We are thankful to the reviewer for the agreeableness
