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      Allocation of Credit Resources and “Borrow to Lend” Activities: Evidence From Chinese-Listed Companies

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          Abstract

          Credit distribution is uneven in the domestic financial market since it is relatively easy for listed companies, mainly state-owned enterprises, to obtain banks’ funds. Unbalanced credit distribution has caused some listed companies to participate in “Borrow to Lend” activities. Based on the traditional “financing priority” theory and credit rationing theory, this paper studies the “Borrow to Lend” shadow banking activities of China’s non-financial listed companies based on the 2007–2018 financial statement data of Chinese-listed companies and discusses the micro-level and macro-level related factors behind this activity. The empirical results show that China’s non-financial listed companies, especially the state-owned enterprises, are participating in obvious “Borrow to Lend” activities. The real economy’s rate of return shows a negative relationship with “Borrow to Lend” activities at the level of individual companies and their industries. This article uses the exogenous growth part of M2 growth to measure monetary policy tightness in terms of macro and credit policies. It uses the ratio of state-owned enterprise loans to total corporate loans as an approximate indicator of the credit distribution structure. The empirical results indicate that state-owned enterprises’ “Borrow to Lend” activities have shifted in the same direction as the tightening of monetary policy after the financial crisis. The proportion of state-owned enterprise loans positively correlates with state-owned enterprises’ “Borrow to Lend” activities.

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          Most cited references31

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          Growing Like China

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            Securitized banking and the run on repo

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              Tunneling through intercorporate loans: The China experience☆

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                Author and article information

                Contributors
                Journal
                Front Psychol
                Front Psychol
                Front. Psychol.
                Frontiers in Psychology
                Frontiers Media S.A.
                1664-1078
                31 March 2022
                2022
                : 13
                : 856056
                Affiliations
                School of Economics and Management, Beihang University , Beijing, China
                Author notes

                Edited by: Muddassar Sarfraz, Putra Malaysia University, Malaysia

                Reviewed by: T. Venkatesan, Sanskrithi School of Business (SSB), India; Mariam Alkawfi, University of Benghazi, Libya

                *Correspondence: Wei Li, 517926287@ 123456qq.com

                This article was submitted to Organizational Psychology, a section of the journal Frontiers in Psychology

                Article
                10.3389/fpsyg.2022.856056
                9008328
                9d5170e5-ae2c-42ec-b353-781aeaae9fd5
                Copyright © 2022 Zhao, Wang and Li.

                This is an open-access article distributed under the terms of the Creative Commons Attribution License (CC BY). The use, distribution or reproduction in other forums is permitted, provided the original author(s) and the copyright owner(s) are credited and that the original publication in this journal is cited, in accordance with accepted academic practice. No use, distribution or reproduction is permitted which does not comply with these terms.

                History
                : 16 January 2022
                : 04 March 2022
                Page count
                Figures: 1, Tables: 9, Equations: 7, References: 32, Pages: 16, Words: 11867
                Categories
                Psychology
                Original Research

                Clinical Psychology & Psychiatry
                borrow to lend,monetary policy,credit rationing,credit equity,efficiency

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