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Specialization in Bank Lending and short-term debt for long-term use: Evidence from China

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  • Li, Zengfu
  • Yu, Zhijun
  • Yang, Zhihao
  • Ding, Zijia

Abstract

This paper discusses the relationship between the Specialization in Bank Lending and short-term debt for long-term use. The findings demonstrate that Specialization in Bank Lending can effectively diminish short-term debt for long-term use, with a particularly pronounced impact on the solid reversibility of corporate assets, overinvestment, and state-owned enterprises. In addition, Specialization in Bank Lending can mitigate short-term debt for long-term use by reducing information asymmetry, enhancing long-term financing capabilities, and optimizing external expectations. The findings of this research provide empirical evidence for addressing the maturity mismatch between investment and financing.

Suggested Citation

  • Li, Zengfu & Yu, Zhijun & Yang, Zhihao & Ding, Zijia, 2025. "Specialization in Bank Lending and short-term debt for long-term use: Evidence from China," Finance Research Letters, Elsevier, vol. 75(C).
    • Handle: RePEc:eee:finlet:v:75:y:2025:i:c:s154461232500090x
    DOI: 10.1016/j.frl.2025.106825
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    Keywords

    Specialization in bank lending; Short-term debt for long-term use; Information asymmetry optimization; Long-term financing capacity enhancement; Anticipation management optimization;
    All these keywords.

    JEL classification:

    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G30 - Financial Economics - - Corporate Finance and Governance - - - General
    • G39 - Financial Economics - - Corporate Finance and Governance - - - Other

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