Speaker: Dr. Yurong Hong, Assitant Professor, Shanghai Jiaotong University
Time: 14:00-15:30 , May 21, 2021
Onsite Venue: Room 202, Institute of Financial Studies
Virtual Platform: Voov Meeting (ID 448 805 541)
Organizers: Institute of Financial Studies, Research Office
Speaker's Profile
Dr. Yurong Hong is an assistant professor at Shanghai Advanced Institute of Finance, Shanghai Jiao Tong University. She holds a doctorate in Finance from The Hong Kong University of Science and Technology. Dr. Hong's research mainly focuses on empirical asset pricing, asset management, insider trading, and behavioral finance. Her paper has been published in Journal of Financial and Quantitative Analysis.
Lecture Preview
Meeting Information: The IFS on-site seminar will be held on 5/21/2021 from 2:00 pm to 3:30 pm in Room 202 on Guanghua Campus. We will also connect our onsite seminar virtually through Tencent (VooV) meeting platform (Meeting ID: 448 805 541).
Abstract: This paper examines how FinTech can lower investment barriers and help households move toward optimal risk-taking, using a unique account-level data on consumption, investments, and FinTech usage from Ant Group. During our sample period, China experienced a rapid increase in FinTech penetration in the form of offline digital payment, and our measure of FinTech adoption is constructed relative to this fast-developing trend of new technology. Taking advantage of our consumption data, we further infer individuals' risk tolerance from their consumption volatility. We find that, while Fin-Tech adoption improves risk-taking for all, the more risk-tolerant individuals benet more from FinTech advancement. The magnitude of FinTech improvement is further quantified relative to the optimal alignment of risk-taking and consumption prescribed by Merton (1971). Aggregating to the city-level, we find significant variations in Fin-Tech adoption across cities in China, owing to the gradual spread of the new technology from Hangzhou to inner China. Examining the enhancement in risk-taking across geographical locations, we
find that cities with low financial-service coverage benet the most from FinTech penetration. Overall, our results show that, by unshackling the traditional constraints, FinTech improves risk-taking for individuals who need it the most.
