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

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  • Kang, Qiaoling
  • Wu, Ji
  • Chen, Minghua
  • Jeon, Bang Nam

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.

Suggested Citation

  • Kang, Qiaoling & Wu, Ji & Chen, Minghua & Jeon, Bang Nam, 2021. "Do macroprudential policies affect the bank financing of firms in China? Evidence from a quantile regression approach," Journal of International Money and Finance, Elsevier, vol. 115(C).
    • Handle: RePEc:eee:jimfin:v:115:y:2021:i:c:s0261560621000401
    DOI: 10.1016/j.jimonfin.2021.102391
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    2. Serena Merrino & Keagile Lesame & Ilias Chondrogiannis, 2024. "Macroprudential policy and credit allocation evidence from South Africa," Working Papers 11062, South African Reserve Bank.
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    4. Yang, Jin Young & Suh, Hyunduk, 2023. "Heterogeneous effects of macroprudential policies on firm leverage and value," International Review of Financial Analysis, Elsevier, vol. 86(C).
    5. Liu, Qiongzhi & Bai, Yun & Song, Hexin, 2023. "The crowding out effect of government debt on corporate financing: Firm-level evidence from China," Structural Change and Economic Dynamics, Elsevier, vol. 65(C), pages 264-272.
    6. Mengtao Chen & Haojie Zhu & Yongming Sun & Ruoxi Jin, 2023. "The impact of housing macroprudential policy on firm innovation: empirical evidence from China," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-11, December.
    7. Wang, Jianda & Dong, Xiucheng & Dong, Kangyin, 2022. "How does ICT agglomeration affect carbon emissions? The case of Yangtze River Delta urban agglomeration in China," Energy Economics, Elsevier, vol. 111(C).

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    More about this item

    Keywords

    Macroprudential policies; Bank financing; Quantile regression;
    All these keywords.

    JEL classification:

    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation

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