IDEAS home Printed from https://ideas.repec.org/a/taf/rcjaxx/v11y2023i4p719-755.html
   My bibliography  Save this article

Does cross-industry loan diversification reduce bank systemic risk? Evidence from listed banks in China

Author

Listed:
  • Chuanhui Ma
  • Junxiong Fang

Abstract

Banking plays a crucial role as the most significant financial intermediary, and the effectiveness of its diversification strategy aimed at reducing individual bank systemic risk is a significant topic in both theory and practice. In this study, we investigate the impact of cross-industry loan diversification on bank systemic risk using data from listed banks, and reveal a significant positive correlation, indicating a clear‘diversification systemic risk’ effect. This effect remains robust across a series of robustness tests. Further research reveals the influence of cross-industry loan diversification on bank systemic risk operates primarily through the channel of interbank asset similarity. Additionally, we find the‘diversification systemic risk’ effect is particularly prominent among joint-stock banks, those with high interbank deposits，and those with high real estate loans. These findings hold important reference value for the ongoing reforms and practices in China aimed at preventing bank systemic risk.

Suggested Citation

  • Chuanhui Ma & Junxiong Fang, 2023. "Does cross-industry loan diversification reduce bank systemic risk? Evidence from listed banks in China," China Journal of Accounting Studies, Taylor & Francis Journals, vol. 11(4), pages 719-755, October.
    • Handle: RePEc:taf:rcjaxx:v:11:y:2023:i:4:p:719-755
    DOI: 10.1080/21697213.2023.2300294
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/21697213.2023.2300294
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/21697213.2023.2300294?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:rcjaxx:v:11:y:2023:i:4:p:719-755. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/rcja .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.