NADS Held 13th "Thoery and Policy" Seminar

Financing Constraints and Corporate Financeialization

Speaker: Peng Yuchao, Executive Director of Silk Road Finance Institute of CUFE

Time: June 29th 2018, Friday, 14:00-16:00

Venue: Room 815, Chongde Building West Wing, RUC

Abstract:

The current economic reality in our country has “from reality to symbol” and has aroused widespread concern in the academic community. This paper constructs a two-sector model of endogenous financing constraints. In the model, banks have differentiated treatment of risk heterogeneity enterprises. In the absence of direct financing, this will lead to the formation of corporate financialization and shadow banking, resulting in higher financial risks. Compared with companies with greater operating risks, companies with smaller operating risks can obtain more credit support from banks, and thus have a higher degree of financialization. Moreover, this effect is even more serious in areas where the state-owned banks account for relatively low proporations. Based on the empirical analysis of the sample of non-financial listed companies in 2007-2016 and various model settings, the above conclusions are supported. Based on the theoretical model and empirical analysis results, this paper proposes a systematic financial system reform framework to achieve both financial stability and economic efficiency.

About Peng Yuchao:

He holds a bachelor's degree in management from Wuhan University, a master's degree in management from Novo School of Business in France, a doctorate in economics from Central University of Finance and Economics, a postdoctoral fellow from the School of Finance at Renmin University of China, and a visiting scholar from the Business School of Durham University in the UK. Main research areas: financial development, shadow banking, monetary policy, etc. He has published more than ten papers in core journals such as Economic Research and Financial Research.