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Large private shareholders, industrial policies and industrial loans of city commercial banks: Evidence from China
We show that large private shareholders have an information advantage about their industry; this can alleviate the information asymmetry suffered by banks, and consequently, increase bank lending to these shareholders’ industry. Using a sample of Chinese city commercial banks, we show that an increa...
Autores principales: | , , |
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Formato: | Online Artículo Texto |
Lenguaje: | English |
Publicado: |
Public Library of Science
2022
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Materias: | |
Acceso en línea: | https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9731413/ https://www.ncbi.nlm.nih.gov/pubmed/36480528 http://dx.doi.org/10.1371/journal.pone.0278654 |
Sumario: | We show that large private shareholders have an information advantage about their industry; this can alleviate the information asymmetry suffered by banks, and consequently, increase bank lending to these shareholders’ industry. Using a sample of Chinese city commercial banks, we show that an increase in the large private shareholders’ shareholding of banks increases bank lending to these shareholders’ industry. Importantly, using Chinese local government industrial policy as a moderator, we find that industrial policies have a positive and significant moderating effect on the relationship between large private shareholders and banks’ industry-specific lending. This relationship strengthens when local industrial policy supports these shareholders’ industry. This helps explain why banks prefer the industries to which their large private shareholders belong to and how industrial policy affects bank credit allocation. |
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