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JING AO DISSERTATION 202207.pdf (1.09 MB)

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Shadow Banking, Asset Allocation, and Bank Performance

Ao, Jing
http://rave.ohiolink.edu/etdc/view?acc_num=kent1660193706695405

Abstract Details

2022, PHD, Kent State University, College of Business and Entrepreneurship, Ambassador Crawford / Department of Finance.
In the first essay, I explore the impact of rising shadow banking in mortgage market on asset allocation and performance of commercial banks with time frame of 1990-2019. Using banks’ exposure index to shadow banking in mortgage market, I find that larger exposure to shadow banking in mortgage origination leads commercial banks allocate less credit to mortgage lending and more credit to commercial and industrial loans. Further, I show that exposure to shadow banking in mortgage market improves banks’ portfolio quality, profitability, and risk performance. Additional analyses demonstrate that the asset allocation effect is stronger for larger banks. The effect is especially pronounced for banks with capital constraints. The results imply that the presence of shadow banking in the mortgage market improves the operating performance of banks. In the second essay, I investigate the effects of shadow banking exposure of commercial banks on the working capital management of the corresponding borrowing firms. Along the finding of my first essay, I show that corresponding corporate borrowers obtain loans with larger amount from commercial banks exposed more to shadow banking in mortgage market. I present the consequent evidence that multiple aspects of borrowers’ working capital practices are affected by the shadow banking lenders’ impact on their lenders through the lending channel: enlarged bank credit supply leads borrowing firms hold less cash and reduce the dependency on the trade credit along their supply chain. Overall, the growth of shadow banking mortgage lenders has a positive spillover to corporate borrowers of traditional banks through the lending channel.
Saiying Deng (Committee Co-Chair)
Xiaoling Pu (Committee Co-Chair)
Steven Dennis (Committee Member)
Eric Johnson (Committee Member)
102 p.
Finance

Recommended Citations

Citations

  • Ao, J. (2022). Shadow Banking, Asset Allocation, and Bank Performance [Doctoral dissertation, Kent State University]. OhioLINK Electronic Theses and Dissertations Center. http://rave.ohiolink.edu/etdc/view?acc_num=kent1660193706695405

    APA Style (7th edition)

  • Ao, Jing. Shadow Banking, Asset Allocation, and Bank Performance. 2022. Kent State University, Doctoral dissertation. OhioLINK Electronic Theses and Dissertations Center, http://rave.ohiolink.edu/etdc/view?acc_num=kent1660193706695405.

    MLA Style (8th edition)

  • Ao, Jing. "Shadow Banking, Asset Allocation, and Bank Performance." Doctoral dissertation, Kent State University, 2022. http://rave.ohiolink.edu/etdc/view?acc_num=kent1660193706695405

    Chicago Manual of Style (17th edition)

kent1660193706695405
260
© 2022, all rights reserved.
This open access ETD is published by Kent State University and OhioLINK.
Release 3.2.12