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The influence of private large shareholders on the distribution of bank loan industry: Evidence from China

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  • Liu, Jie
  • Zhang, Qiaoyun
  • Xu, Kun

Abstract

We take China’s city commercial banks from 2007 to 2020 as the research object, according to the background of shareholders’ main business industry, shareholding ratio and the distribution of bank loan industry, to empirically study the influence of private large shareholders on the city commercial bank’s preference of loan industry. We found that the increase in the shareholding ratio of private large shareholders can increase the bank’s loan supply to their industries. This effect is significant for private large shareholders in different industries and banks of different sizes. Good corporate governance has a moderating effect on the influence of private large shareholders, which is embodied in the fact that the strong checks and balances of state-owned large shareholders and the independent director system weaken the influence of private large shareholders, while the insider control strengthens the influence of private large shareholders. Shareholders in the same industry as private large shareholders increase the influence of the private large shareholders, which is mainly manifested in the private shareholders; on the contrary, shareholders in other industries weaken the influence of the private large shareholders, mainly manifested in the state-owned shareholders. Private large shareholders have effectively reduced the non-performing loan ratio of banks.

Suggested Citation

  • Liu, Jie & Zhang, Qiaoyun & Xu, Kun, 2023. "The influence of private large shareholders on the distribution of bank loan industry: Evidence from China," The North American Journal of Economics and Finance, Elsevier, vol. 68(C).
    • Handle: RePEc:eee:ecofin:v:68:y:2023:i:c:s1062940823001262
    DOI: 10.1016/j.najef.2023.102003
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    References listed on IDEAS

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    1. Haifeng Huang & Bingjie Shen & Tao Wang, 2019. "The effects of bank ownership on lending behaviour for different types of loans throughout the business cycle," International Finance, Wiley Blackwell, vol. 22(2), pages 201-220, August.
    2. Becht, Marco & Bolton, Patrick & Röell, Ailsa, 2007. "Corporate Law and Governance," Handbook of Law and Economics, in: A. Mitchell Polinsky & Steven Shavell (ed.), Handbook of Law and Economics, edition 1, volume 2, chapter 12, pages 829-943, Elsevier.
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    More about this item

    Keywords

    Private large shareholders; City commercial banks; Loan industry;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G32 - Financial Economics - - Corporate Finance and Governance - - - Financing Policy; Financial Risk and Risk Management; Capital and Ownership Structure; Value of Firms; Goodwill
    • G34 - Financial Economics - - Corporate Finance and Governance - - - Mergers; Acquisitions; Restructuring; Corporate Governance

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