Shadow Funding and Economic Growth: Evidence from China

Xu Feng, Xiaowen An, Yahui An, Yajun Xiao*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

1 Citation (Scopus)


Using popular liability-side wealth management products in China, we construct an informative measure of shadow funding and shadow credit by extension. This measure reflects the risk appetites of financial intermediaries and their ability to expand their balance sheets through bank–shadow-bank cooperation. Our measure possesses unique predictive power for future economic activity. An increase in the measure corresponds to increases in investment and consumption, which, in turn, reduce financing costs due to improvements in economic development.

Original languageEnglish
Pages (from-to)589-611
Number of pages23
JournalJournal of Money, Credit and Banking
Issue number2-3
Publication statusAccepted/In press - Jan 2023


  • economic activity
  • intermediary
  • shadow credit
  • shadow funding
  • wealth management products


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