Abstract
| Original language | English |
|---|---|
| Pages (from-to) | 38-49 |
| Number of pages | 11 |
| Journal | Journal of Financial Stability |
| Volume | 40 |
| Early online date | 28 Nov 2018 |
| DOIs | |
| Publication status | Published - Feb 2019 |
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Keywords
- banking
- capital
- adjustment speed
- government ownership
- China
- Government ownership
- Adjustment speed
- Banking
- Capital
ASJC Scopus subject areas
- Economics, Econometrics and Finance(all)
- Finance
Cite this
Do different forms of government ownership matter for bank capital behavior? Evidence from China. / Jiang, Chunxia (Corresponding Author); Liu, Hong (Corresponding Author); Molyneux, Phil (Corresponding Author).
In: Journal of Financial Stability, Vol. 40, 02.2019, p. 38-49.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Do different forms of government ownership matter for bank capital behavior?
T2 - Evidence from China
AU - Jiang, Chunxia
AU - Liu, Hong
AU - Molyneux, Phil
N1 - We are grateful for comments from Iftekhar Hasan (the Editor), three anonymous referees, Kose John, Bill Francis, and participants at various seminars, the IFABS Barcelona Conference (2016), and Wolpertinger Conference Santander (2017). All errors and omissions are of course the responsibility of the authors. This research is financially supported by National Natural Science Foundation of China (No.: 71363014).
PY - 2019/2
Y1 - 2019/2
N2 - This study attempts to reconcile the conflicting theoretical predictions regarding how government ownership affects bank capital behaviour. Using a unique Chinese bank dataset over 2006-2015 we find that government-owned banks have higher target capital ratios and adjust these ratios faster compared to private banks, supporting the ‘development/political’ view of the government’s role in banking. This effect is stronger for local government-owned and state enterprise-owned banks than for central government-owned banks. We also find that undercapitalized government-owned banks increase equity while undercapitalized foreign banks contract assets and liabilities as their respective main strategy to adjust their capital ratios.
AB - This study attempts to reconcile the conflicting theoretical predictions regarding how government ownership affects bank capital behaviour. Using a unique Chinese bank dataset over 2006-2015 we find that government-owned banks have higher target capital ratios and adjust these ratios faster compared to private banks, supporting the ‘development/political’ view of the government’s role in banking. This effect is stronger for local government-owned and state enterprise-owned banks than for central government-owned banks. We also find that undercapitalized government-owned banks increase equity while undercapitalized foreign banks contract assets and liabilities as their respective main strategy to adjust their capital ratios.
KW - banking
KW - capital
KW - adjustment speed
KW - government ownership
KW - China
KW - Government ownership
KW - Adjustment speed
KW - Banking
KW - Capital
UR - http://www.scopus.com/inward/record.url?scp=85058375547&partnerID=8YFLogxK
UR - http://www.mendeley.com/research/different-forms-government-ownership-matter-bank-capital-behavior-evidence-china
U2 - 10.1016/j.jfs.2018.11.005
DO - 10.1016/j.jfs.2018.11.005
M3 - Article
VL - 40
SP - 38
EP - 49
JO - Journal of Financial Stability
JF - Journal of Financial Stability
ER -