Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/249461 
Year of Publication: 
2021
Series/Report no.: 
ADBI Working Paper No. 1282
Publisher: 
Asian Development Bank Institute (ADBI), Tokyo
Abstract: 
This research investigates the impact of Fintech development on an important type of crime: theft. Based on Becker's rational criminal theory, we suggest that Fintech development could mitigate theft activities by increasing the earnings from legitimate work, relaxing potential criminals' financial constraints, and reducing the expected gains from theft. We established a unique dataset containing information on more than 1 million theft defendants during the period 2014-18, which we extracted from 874,000 judgment statements. Then, we aggregated them to construct a city-year panel of theft activities and matched it with the city-level economic activities and Fintech development level. The results show that a 1 standard deviation increase in the Fintech development level has a significant association with a 0.39 standard deviation decrease in thefts' density. Robustness checks and instrumental variable estimation support the main results. Further, the development of Fintech reduces thefts' density by reducing residents' cash holding and providing more job opportunities. Finally, we utilized a nationally representative household survey to estimate the cost of theft for households, finding that victims suffer from more mental health problems, increasing their health expenditure. Our results suggest an unexpected source of welfare gain from the development of Fintech: an improvement in public security.
Subjects: 
fintech
theft
crime
People's Republic of China
JEL: 
G59
K14
K42
C81
Creative Commons License: 
cc-by-nc-nd Logo
Document Type: 
Working Paper

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