Political uncertainty and city bank lending in China: Evidence from city government official changes

Maoyong Cheng, Pin Guo, Justin Yiqiang Jin and Hongyan Geng

Emerging Markets Review, 2021, vol. 49, issue C

Abstract: Using data hand collected in China between 2001 and 2016, this paper examines how political uncertainty affects city bank lending. Our results show that political uncertainty causes banks to significantly increase loan growth. These results are moderated by the characteristics of government officials, bank characteristics, and the degree of marketization. Our results further show that changes by government officials increase medium-term loan growth, mainly for the real estate and public utilities sector. Finally, we show that city government official changes increase bank lending and, thus, increase credit risk, that is, bank lending has a mediating effect.

Keywords: Political uncertainty; Loan growth; Credit risk; China's city bank (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (11)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:49:y:2021:i:c:s1566014121000108

DOI: 10.1016/j.ememar.2021.100802

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