Abstract
ABSTRACT This article applies firm-level quarterly data to investigate the effects of property rights reform and internet finance on Chinese monetary policy effectiveness. We find that internet finance development strengthens monetary policy effects through the interest rate channel more than the credit channel. However, the increasing proportion of state-owned enterprises blocks the interest rate channel. It may improve the monetary operations during a severe recession as it weakens the financial accelerator mechanism. Nevertheless, it hinders the monetary policy’s overall effectiveness and the benefit of Fintech innovations in the long term. Hence, institutional reforms are needed to complement Fintech developments.
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