The Contraction of Chinese Shadow Banking and Corporate Investment Behavior——Evidence from the Background of the"New Rules on Asset Management"
Employing the exogenous scenario introduced by the"New Rules on Asset Management"in April 2018,we try to explore the impact of the contraction of Chinese-style shadow banking on corporate investment behavior.We find that the regulation leads to a 18.3％decrease in capital expenditure for firms relying on shadow banking system prior to the shock.Then,we test three underlying mechanisms,which include the decrease of corporate borrowing,the increase of corporate financing constraints and the reduc-tion of debt maturity.We also provide the empirical evidence that the implementation of the"New Rules on Asset Management"optimizes the allocation of capital across firms.
"New Rules on Asset Management"shadow bankingcorporate investment
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