Non-Financial Enterprises’ Shadow Banking Business and Total Factor Productivity of Enterprises

Chen Yang and Weitao Shen
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Chen Yang: Department of Business Management, School of Management, Xiamen University, Xiamen 361005, China
Weitao Shen: Department of Business Management, School of Management, Xiamen University, Xiamen 361005, China

Sustainability, 2022, vol. 14, issue 13, 1-19

Abstract: This study empirically analyzes the impact of the shadow banking business (SBB) of non-financial enterprises (non-FEs) on the total factor productivity (TFP) of enterprises using data concerning non-FEs listed in China’s A-share market from 2008 to 2019. The results show that non-FEs’ SBB has a significantly negative impact on their TFP, and for every 10% increase in the involvement of non-FEs in SBB, their TFP decreases by 4.22% on average. The negative effect is more significant in the period of loose monetary policy, lower industry competition, and non-state-owned enterprises. Alleviating financing constraints, reducing information asymmetry, and optimizing financial resource allocation may mitigate the negative effect. Our study reveals the mechanism by which non-FEs’ SBB inhibits their TFP. These findings enrich the theoretical research on the two, and provide empirical evidence to alleviate the “off real to virtual” of the economy and promote long-term, high-quality and sustainable economic development.

Keywords: shadow banking; total factor productivity; financing constraints; information asymmetry; financial mismatch (search for similar items in EconPapers)
JEL-codes: O13 Q Q0 Q2 Q3 Q5 Q56 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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