Bank fund reallocation and economic growth: Evidence from China

Philip C. Chang, Chunxin Jia and Zhicheng Wang

Journal of Banking & Finance, 2010, vol. 34, issue 11, 2753-2766

Abstract: This paper examines bank fund reallocation and regional economic growth based on 1991-2005 provincial-level data of four state-owned commercial banks of China that practice fund reallocation nation-wide. We find no correlation between bank fund reallocation and regional economic growth or between bank loans and regional economic growth. We find, however, a positive association between bank deposits and growth. It appears economic growth leads financial development in China, not the other way around. Furthermore, as China's market-oriented reforms deepen, fund reallocation and loans start to manifest positive effects on growth even though the banks are government owned.

Keywords: Bank; loans; Finance; and; growth; Fund; reallocation; State-owned; banks; China (search for similar items in EconPapers)
Date: 2010
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Citations: View citations in EconPapers (39)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jbfina:v:34:y:2010:i:11:p:2753-2766

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