Does Digital Transformation Drive the Adjustment of Bank Loan Structure? Evidence From China

ABSTRACT This article examines the impact of digital transformation on bank loan structure. We employ text mining and the entropy weight method to measure the five‐dimensional digital transformation index of banks and conduct an empirical analysis based on the panel data of 132 commercial banks in China from 2013 to 2022. The results indicate that digital transformation significantly drives the adjustment of various types of bank loan structures, increasing the proportion of unsecured loans, personal loans, medium‐ and long‐term loans, manufacturing loans, and green loans. In terms of the impact mechanism, improving information screening capability and enhancing risk control capability are two key channels through which digital transformation exerts its impact. Furthermore, the heterogeneity analysis reveals that the impact of digital transformation on loan structures varies among banks with different asset size, profitability, and management efficiency. Finally, we propose targeted suggestions for commercial banks and regulatory authorities.