Specialization in Bank Lending and short-term debt for long-term use: Evidence from China

Zengfu Li, Zhijun Yu, Zhihao Yang and Zijia Ding

Finance Research Letters, 2025, vol. 75, issue C

Abstract: This paper discusses the relationship between the Specialization in Bank Lending and short-term debt for long-term use. The findings demonstrate that Specialization in Bank Lending can effectively diminish short-term debt for long-term use, with a particularly pronounced impact on the solid reversibility of corporate assets, overinvestment, and state-owned enterprises. In addition, Specialization in Bank Lending can mitigate short-term debt for long-term use by reducing information asymmetry, enhancing long-term financing capabilities, and optimizing external expectations. The findings of this research provide empirical evidence for addressing the maturity mismatch between investment and financing.

Keywords: Specialization in bank lending; Short-term debt for long-term use; Information asymmetry optimization; Long-term financing capacity enhancement; Anticipation management optimization (search for similar items in EconPapers)
JEL-codes: G21 G30 G39 (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:finlet:v:75:y:2025:i:c:s154461232500090x

DOI: 10.1016/j.frl.2025.106825

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