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Do macroprudential policies affect the bank financing of firms in China? Evidence from a quantile regression approach

Qiaoling Kang, Ji Wu, Minghua Chen and Bang Jeon ()

Journal of International Money and Finance, 2021, vol. 115, issue C

Abstract: This paper investigates the impact of macroprudential policies on firms’ bank financing level in China. Applying the unconditional quantile regression approach to the panel data of Chinese public corporations during the period of 2000–2016, we find consistent evidence for a negative and non-monotonic impact of macroprudential policies on the level of firms’ bank financing, conditional on their quantiles in the distribution. The impact of macroprudential policies is increasingly conspicuous with the level of firms’ bank financing but tends to decline after a threshold. The outcome of macroprudential policies is largely driven by the result of firms’ short-term financing and the policies targeted at the financial institutions. We also explore the heterogeneity of the nexus between macroprudential policies and firms’ bank financing affected by the ownership, size and industrial type of firms.

Keywords: Macroprudential policies; Bank financing; Quantile regression (search for similar items in EconPapers)
JEL-codes: E58 G18 (search for similar items in EconPapers)
Date: 2021
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DOI: 10.1016/j.jimonfin.2021.102391

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