The influence of private large shareholders on the distribution of bank loan industry: Evidence from China

Jie Liu, Qiaoyun Zhang and Kun Xu

The North American Journal of Economics and Finance, 2023, vol. 68, issue C

Abstract: We take China’s city commercial banks from 2007 to 2020 as the research object, according to the background of shareholders’ main business industry, shareholding ratio and the distribution of bank loan industry, to empirically study the influence of private large shareholders on the city commercial bank’s preference of loan industry. We found that the increase in the shareholding ratio of private large shareholders can increase the bank’s loan supply to their industries. This effect is significant for private large shareholders in different industries and banks of different sizes. Good corporate governance has a moderating effect on the influence of private large shareholders, which is embodied in the fact that the strong checks and balances of state-owned large shareholders and the independent director system weaken the influence of private large shareholders, while the insider control strengthens the influence of private large shareholders. Shareholders in the same industry as private large shareholders increase the influence of the private large shareholders, which is mainly manifested in the private shareholders; on the contrary, shareholders in other industries weaken the influence of the private large shareholders, mainly manifested in the state-owned shareholders. Private large shareholders have effectively reduced the non-performing loan ratio of banks.

Keywords: Private large shareholders; City commercial banks; Loan industry (search for similar items in EconPapers)
JEL-codes: G21 G32 G34 (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ecofin:v:68:y:2023:i:c:s1062940823001262

DOI: 10.1016/j.najef.2023.102003

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