Central University of Finance and Economics
Institutional Affiliation: Central University of Finance and Economics
NBER Working Papers and Publications
|May 2019||Rise of Bank Competition: Evidence from Banking Deregulation in China|
with Hong Ru, Robert Townsend, Xiaoguang Yang: w25795
Using proprietary individual level loan data, this paper explores the economic consequences of the 2009 bank entry deregulation in China. Such deregulation leads to higher screening standards, lower interest rates, and lower delinquency rates for corporate loans from entrant banks. Consequently, in deregulated cities, private firms with bank credit access increase asset investments, employment, net income, and ROA. In contrast, the performance of state-owned enterprises (SOEs) does not improve following deregulation. Deregulation also amplifies bank credit from productive private firms to inefficient SOEs due mainly to SOEs’ soft budget constraints. This adverse effect accounts for 0.31% annual GDP losses.
|September 2016||Impacts of Monetary Stimulus on Credit Allocation and the Macroeconomy: Evidence from China|
with Kaiji Chen, Patrick Higgins, Daniel F. Waggoner, Tao Zha: w22650
We construct a micro dataset that covers all newly originated bank loans by the 19 largest Chinese banks to individual firms and spans all sectors in the Chinese economy. We propose a two-stage framework comprised of a macro SVAR model and a dynamic panel model to estimate the average and aggregate effects of the 2009 monetary stimulus on the macroeconomy and credit allocation to SOEs and non-SOEs across key sectors. The two-stage framework is vital for obtaining the aggregate effects from the micro model. While credit expansion due to monetary stimulus favored the average SOE in manufacturing, non-SOEs enjoyed preferential credit treatment in real estate. There was no obvious favoritism of credit allocation toward the average SOE in infrastructure. In aggregate, non-SOEs are quantitative...