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Research on the Impact of Financial Disintermediation on Operational Performance

Author(s)

Jingpeng Sun*

Affiliation(s)

Business College, Department of Accounting, Renmin University of China, Beijing, China *Corresponding Author

Abstract

This study explores the impact of financial disintermediation on the operational performance of commercial banks, leveraging a panel dataset of 357 Chinese commercial banks spanning 2010–2023. Return on Assets (ROA) serves as the dependent variable to measure operational performance, while the ratio of securities financing to assets (TM) is the core explanatory variable representing financial disintermediation. Empirical results indicate that financial disintermediation exerts a significant positive impact on commercial banks’ operational performance, which is robust to sample adjustments (excluding 2020–2023 pandemic periods) and core explanatory variable lag term tests. Heterogeneity analysis reveals that this positive impact is more pronounced for banks with low asset turnover, as disintermediation drives business diversification and efficiency improvements to offset traditional operational pressures. In contrast, the impact is insignificant for high asset turnover banks due to their stronger adaptive capabilities. Additional findings show that total asset turnover positively correlates with performance, while average salary and non-performing loan ratio have negative effects. This study provides empirical evidence for the positive value of financial disintermediation in promoting commercial bank development, offering insights for banks to optimize asset allocation and business structures amid market transformation

Keywords

Commercial Banks; Financial Disintermediation; Operational Performance

References

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