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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...

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Detalles Bibliográficos
Autores principales: Liu, Jie, Zhang, Qiaoyun, Xiao, Chao
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Public Library of Science 2022
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
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author Liu, Jie
Zhang, Qiaoyun
Xiao, Chao
author_facet Liu, Jie
Zhang, Qiaoyun
Xiao, Chao
author_sort Liu, Jie
collection PubMed
description 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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spelling pubmed-97314132022-12-09 Large private shareholders, industrial policies and industrial loans of city commercial banks: Evidence from China Liu, Jie Zhang, Qiaoyun Xiao, Chao PLoS One Research Article 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. Public Library of Science 2022-12-08 /pmc/articles/PMC9731413/ /pubmed/36480528 http://dx.doi.org/10.1371/journal.pone.0278654 Text en © 2022 Liu et al https://creativecommons.org/licenses/by/4.0/This is an open access article distributed under the terms of the Creative Commons Attribution License (https://creativecommons.org/licenses/by/4.0/) , which permits unrestricted use, distribution, and reproduction in any medium, provided the original author and source are credited.
spellingShingle Research Article
Liu, Jie
Zhang, Qiaoyun
Xiao, Chao
Large private shareholders, industrial policies and industrial loans of city commercial banks: Evidence from China
title Large private shareholders, industrial policies and industrial loans of city commercial banks: Evidence from China
title_full Large private shareholders, industrial policies and industrial loans of city commercial banks: Evidence from China
title_fullStr Large private shareholders, industrial policies and industrial loans of city commercial banks: Evidence from China
title_full_unstemmed Large private shareholders, industrial policies and industrial loans of city commercial banks: Evidence from China
title_short Large private shareholders, industrial policies and industrial loans of city commercial banks: Evidence from China
title_sort large private shareholders, industrial policies and industrial loans of city commercial banks: evidence from china
topic Research Article
url 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
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