Financial Volatility and Digital Finance
PI: Prof. Chen Lin, HKU
Financial volatility not only creates uncertainty in the financial market but also impacts all aspects of society. The research will study how financial market fluctuation affect corporates and households, and how digital finance can help mitigate it. Utilizing the recent financial market fluctuations due to the outbreak of Covid-19, the study will first study the impact of the financial shock on corporate financing and how it will affect the household consumption decision, especially health care decision. Previous literature find that uncertainty like financial volatility is related to financial constraints for firms and can affect consumer credit decision (e.g. Carvalho, 2018; Di Maggio et al., 2019). Therefore, we will explore how financial technology can help firms (especially small business) and household rebuilt their credit lines to mitigates the adverse impact of financial volatility.