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Determinants Of Agriculture-Related Loan Default: Evidence From China

Author

Listed:
  • Zhichao Yin

    (Capital University of Economics and Business)

  • Lei Meng

    (East China University of Science and Technology)

  • Yezhou Sha

    (Capital University of Economics and Business)

Abstract

This paper investigates agriculture-related loan default in 2002–2009 through a large data set from a leading Chinese state-owned bank. Using logit regression, we find the default rate on agriculture-related loans is significantly higher than that on non–agriculture-related loans. We find that base interest rates, loan maturity, the type of collateral, firm size, ownership structure, and managerial quality rating have a significant impact on agriculture-related loan default, but this also depends on how agriculture-related loans are defined. The results provide insight into the real impact of monetary policy on agriculture-related lending.

Suggested Citation

  • Zhichao Yin & Lei Meng & Yezhou Sha, 2020. "Determinants Of Agriculture-Related Loan Default: Evidence From China," Bulletin of Monetary Economics and Banking, Bank Indonesia, vol. 23(Special I), pages 129-150, January.
    • Handle: RePEc:idn:journl:v:23:y:2020:i:spg:p:129-150
    DOI: https://doi.org/10.21098/bemp.v23i0.1160
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    Cited by:

    1. Sha, Yezhou, 2022. "Rating manipulation and creditworthiness for platform economy: Evidence from peer-to-peer lending," International Review of Financial Analysis, Elsevier, vol. 84(C).

    More about this item

    Keywords

    Agriculture-related Loan; Default; Credit Risk; Monetary Policy; Collateral;
    All these keywords.

    JEL classification:

    • G38 - Financial Economics - - Corporate Finance and Governance - - - Government Policy and Regulation
    • H23 - Public Economics - - Taxation, Subsidies, and Revenue - - - Externalities; Redistributive Effects; Environmental Taxes and Subsidies
    • O13 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Agriculture; Natural Resources; Environment; Other Primary Products
    • P23 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Factor and Product Markets; Industry Studies; Population
    • Q14 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - Agricultural Finance

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