Shadow Funding and Economic Growth: Evidence from China

Xu Feng; Xiaowen An; Yahui An; Yajun Xiao

doi:10.1111/jmcb.13008

Shadow Funding and Economic Growth: Evidence from China

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

^*Corresponding author for this work

Department of Finance

Research output: Contribution to journal › Article › peer-review

5 Citations (Scopus)

Abstract

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 language	English
Pages (from-to)	589-611
Number of pages	23
Journal	Journal of Money, Credit and Banking
Volume	56
Issue number	2-3
DOIs	https://doi.org/10.1111/jmcb.13008
Publication status	Published - Mar 2024

UN SDGs

This output contributes to the following UN Sustainable Development Goals (SDGs)

SDG 8 Decent Work and Economic Growth

Keywords

economic activity
intermediary
shadow credit
shadow funding
wealth management products

Access to Document

10.1111/jmcb.13008

Cite this

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title = "Shadow Funding and Economic Growth: Evidence from China",

abstract = "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.",

keywords = "economic activity, intermediary, shadow credit, shadow funding, wealth management products",

author = "Xu Feng and Xiaowen An and Yahui An and Yajun Xiao",

note = "Funding Information: We would like to thank Sanjay K. Chugh (Editor), the anonymous referee, and the conference and seminar participants at the FMA 2019 Annual Meeting, the Conference on Systemic Risk and Financial Stability 2019 in Freiburg. This paper is supported by the National Natural Science Foundation of China (Grant No. 71871157, 72141304, and 71790594). Part of this work was completed while Yajun Xiao was an assistant professor at Smurfit Business School, University College Dublin. Publisher Copyright: {\textcopyright} 2022 The Authors. Journal of Money, Credit and Banking published by Wiley Periodicals LLC on behalf of Ohio State University.",

year = "2024",

month = mar,

doi = "10.1111/jmcb.13008",

language = "English",

volume = "56",

pages = "589--611",

journal = "Journal of Money, Credit and Banking",

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T1 - Shadow Funding and Economic Growth

T2 - Evidence from China

AU - Feng, Xu

AU - An, Xiaowen

AU - An, Yahui

AU - Xiao, Yajun

N1 - Funding Information: We would like to thank Sanjay K. Chugh (Editor), the anonymous referee, and the conference and seminar participants at the FMA 2019 Annual Meeting, the Conference on Systemic Risk and Financial Stability 2019 in Freiburg. This paper is supported by the National Natural Science Foundation of China (Grant No. 71871157, 72141304, and 71790594). Part of this work was completed while Yajun Xiao was an assistant professor at Smurfit Business School, University College Dublin. Publisher Copyright: © 2022 The Authors. Journal of Money, Credit and Banking published by Wiley Periodicals LLC on behalf of Ohio State University.

PY - 2024/3

Y1 - 2024/3

N2 - 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.

AB - 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.

KW - economic activity

KW - intermediary

KW - shadow credit

KW - shadow funding

KW - wealth management products

U2 - 10.1111/jmcb.13008

DO - 10.1111/jmcb.13008

M3 - Article

AN - SCOPUS:85147007136

SN - 0022-2879

VL - 56

SP - 589

EP - 611

JO - Journal of Money, Credit and Banking

JF - Journal of Money, Credit and Banking

IS - 2-3

ER -

Shadow Funding and Economic Growth: Evidence from China

Abstract

UN SDGs

Keywords

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