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Corporate financing from shadow banking and bond credit spreads

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  • Lei, Ningze
  • Huang, Liqiang

Abstract

This paper studies the impact of the scale of shadow banking financing of enterprises on the credit spreads of bonds. Using corporate bonds in China's capital markets, we find that the scale of funds incorporated by enterprises' shadow banking channels has a significant positive impact on the credit spreads of bonds. We further find that the region, property rights, and profitability of bond-issuing enterprises all have significant moderating effects on the above impact. Specifically, shadow bank financing positively impacts bond credit spreads for enterprises in the central and western regions, with weaker profitability and non-state-owned enterprises.

Suggested Citation

  • Lei, Ningze & Huang, Liqiang, 2023. "Corporate financing from shadow banking and bond credit spreads," Finance Research Letters, Elsevier, vol. 58(PB).
    • Handle: RePEc:eee:finlet:v:58:y:2023:i:pb:s154461232300853x
    DOI: 10.1016/j.frl.2023.104481
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    References listed on IDEAS

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    Cited by:

    1. Wan, Rui & Fan, Wencheng & Wang, Xiaoping, 2024. "Local government financing vehicle restructuring, implicit government guarantees and debt financing costs: Evidence from the Chinese municipal corporate bond market," Economic Systems, Elsevier, vol. 48(2).

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