Study On Zombie Lending Base On The Collusion Between Banks,government And Firms

The main tasks of supply-side structural reform are "cutting overcapacity,destocking,deleveraging,reducing costs and strengthening weak links".Cutting overcapacity is the first of the five tasks,with the focus on dealing with zombie firms.In fact,the disposal of zombie firms is not only an important part of the current economic work,but also a key problem.The root cause of the zombie enterprise problem requires a thorough clarification of the logic behind its relationship with various stakeholders.In fact,zombie firms cannot survive without long-term blood transfusion from the government and banks.It is in the short-term interests of all three parties to keep zombie companies alive.As zombie companies,management and shareholders are reluctant to clear themselves,preferring to rely on "gnawing" banks and governments to survive;For banks,the impact of zombie enterprise bankruptcy on capital adequacy ratio,provision coverage ratio and other indicators of banks and a series of negative effects,so in the "weak supervision" environment,banks are more willing to help zombie firms cover risks and issue zombie loans;In aspects of local government,clearing the zombie companies means employment and economic pressure to a certain extent,may even trigger a regional financial risk,in order to avoid the consequences,local governments will naturally direct or ask for bank lending for zombies,so have conspired to motivation and conspiring to operating space.On the basis of three main body gradually formed a "solidarity" collusion between relations,lack of incentive to break the deadlock.In view of this,this paper takes zombie lending as the theme,attempts to establish the theoretical framework of the collusion relationship between zombie firms and government,banks through literature reviews,logical deduction and empirical analysis,and puts forward policy implications.In addition to the introduction and conclusion,this paper consists of six chapters.The introduction mainly expounds the research background,theoretical value and practical significance of the topic,research ideas,overall framework,research methods and main contents,possible innovations and shortcomings,summarizes the existing literature related to the topic,and reviews the relevant literature.The first chapter is a typical fact description of the collusion between government,banks and zombie firms,aiming to provide a factual basis for the research content of the whole paper.The second chapter provides logical combing and research design for the study of this paper from the perspective of the credit rationing theory of collusion theory and the soft constraint theory of budget,sorts out the transmission mechanism of the collusion relationship between the government and zombie firms,banks and zombie firms,and constructs the collusion model among the three.Chapter three is the recognition and feature analysis of zombie lending.This section summarizes and refines the identification standard of zombie firms,constructs a set of suitable judgment method for listed zombie firms in China at present stage,and matches the listed company financial and credit data,identifies the zombie firms and zombie lending,analyzes the results of statistics,according to such levels as year,province,industry,ownership characteristics,etc.Chapter four is the collusion between government and enterprises,and zombie firms.Based on the data of zombie firms identified in chapter three,this part tests the collusion relationship between local government and zombie firms through multiple regression analysis.The fifth chapter analyzes the collusion between financial supervision,banks and enterprises and zombie lending.This chapter uses the zombie lending data in chapter three to examine the impact of financial regulation on zombie lending.The sixth chapter studies the government intervention,collusion between bank and enterprise,and zombie lending.This section clarifies whether government intervention contributed to banks' zombie lending behavior.Finally,summarizing the conclusion and policy enlightenment,which is the work done in this paper and the relevant conclusions and policy enlightenment.The main conclusions of the paper are as follows:Firstly,there are collusion motivations,conditions,and channels between the government,banks,and zombie firms.In the government-enterprise relationship,the fiscal decentralization of the central and local governments is the institutional background that produces the collusion relationship between the government and the enterprise.The imbalance in fiscal revenue and expenditure of the local government,coupled with the pressure on GDP,taxation,employment,and the "shell resources" of listed companies The competition has created a strong motive for collusion between government and enterprises,and local governments often choose to respond negatively to the central government's attitude to clear zombie firms and large-scale subsidies to achieve collusion.In the bankenterprise relationship,due to China's current five-tier classification of non-performing loans,there is greater flexibility in the recognition of non-performing loans,and commercial banks may hide a large number of zombie lending in overdue loans,creating conditions for banks and zombies to collude.Compatibility of interests between the two parties also constitutes a motive for collusion between banks and enterprises.In terms of bank-government-enterprise relations,there is the fact that local governments have colluded with zombie firms through local banks.Local banks have close relations with local governments,which directly leads to local banks' traces of strong local government intervention while gaining local policy resource advantages.Secondly,under the asymmetric information,the collusion between banks and enterprises led to the formation of zombie firms and zombie lending.Local government assistance to zombie firms can bring regional social stability.This is one of the reasons why the central government as a client acquiesces in government-enterprise collusion to a certain extent.If the central government as the client must prevent collusion in an asymmetric information environment,local governments and zombie firms need to be given incentives and compensation to reduce the collusion gains of agents and supervisors.In addition,after the introduction of commercial banks as an economic entity,it was found that when the social costs associated with loan defaults are high,the government will have an incentive to authorize banks to issue zombie lending,that is,government may acquiesce or coerce the collusion between banks and zombie firms.Thirdly,the distribution of zombie firms and zombie lending is heterogeneous at the industry,regional,and ownership levels.China's listed zombie firms are mainly concentrated in industries with excess capacity such as steel and underdeveloped regions.At the level of ownership distribution,although the number of private zombie firms is the largest in absolute numbers,the proportion of private zombie firms is far lower than that of state-owned zombie firms under the dilution of the base.The distribution of zombie lending has two characteristics: on the one hand,zombie lending account for a relatively high proportion in state-owned enterprises;on the other hand,although various types of banks are more inclined to provide loan support for normal enterprises,considering the size of loans,state-owned commercial banks are the largest source of funds for zombie firms.From the perspective of lending,rural commercial banks and city commercial banks have the largest tendency for zombie lending.Fourthly,the collusion between government and enterprise is the institutional cause of zombie firms.Because local governments need enterprises to stabilize employment and maintain their achievements,they can help generously when companies are in trouble,and companies can reciprocate when the government needs them,so as to reach a tacit collusion relationship.The empirical test results show that the increase in the possibility of collusion between local government and enterprises will significantly aggravate the formation of zombie firms.They achieve collusion through government subsidies and bank credit,and correspondingly,zombie firms with more employment responsibility will get more government subsidies.Fifthly,financial regulation is the driving factor behind zombie lending.Under the constraints of capital and liquidity,based on the reasons of covering up bad debts and delaying the exposure of non-performing loans to meet capital and liquidity constraints,banks with lower capital adequacy ratios,higher non-performing loan ratios,and lower liquidity levels will take risks and choose to collude with zombie firms and issue zombie lending,and through further analysis,it is found that based on operational convenience and characteristics of zombie firms' ownership,zombie firms and banks collude through the long-term loans and credit loans.Sixthly,government intervention is an important influencing factor for banks' zombie lending behavior.As the bank's credit behavior is extremely susceptible to strong policyoriented constraints,the regions with stronger local government intervention will have larger zombie lending,and loose monetary policies,“four trillion” stimulus policies,and selective industrial policies It will strengthen the positive impact of local government intervention on zombie lending.In the process,medium-and long-term loans,secured loans and credit loans are important means of collusion between governments,banks and zombie firms.Based on the above research conclusions,this paper puts forward the following policy recommendations:Firstly,we need to improve the incentive and assessment mechanism and eradicate the complicity of government,firms and banks.Innovate the local government performance evaluation model,especially the medium-and long-term index performance appraisal;In order to reduce the distorted incentives brought by the current appraisal system,we need to make comprehensive and dynamic adjustments to the executive compensation extension mechanism,refine the salary structure,and weaken or even avoid the short-term profitseeking behaviors of local officials and bank executives.Secondly,we should improve the efficiency of resource allocation and weaken the channels through which government,firms and banks conspired.On the one hand,in terms of the efficiency of government subsidies,we should strengthen the performance evaluation mechanism of local governments on fiscal subsidies,pay attention to the scientificity and rationality of subsidy distribution,and reshape the incentive mechanism that emphasizes the efficiency of expenditure.On credit resources allocation efficiency,on the other hand,to consider in order to improve bank regulatory capital and liquidity regulation as the core measures,encourage banks to actively explore innovative capital instruments absorb and revitalize the stock of assets,zombies and the people's bank of China,silver circ jointly establish a zombie loan regulatory system,dynamic monitor zombie loans,stock take fund release.Thirdly,stiffen budgetary constraints on zombie companies,banks and local governments and reduce the scope for collusion.Adhere to the market-oriented legal system to remove zombie firms,hardening the budget constraints of economic entities.In the process of clearing zombie firms,information disclosure shall be used to supervise and guide the flow of resources to reduce various stakeholders' blood transfusion to zombie firms in various forms,thus forcing zombie firms to clear the market or reform and transform.The innovations of this paper are as following.Firstly,based on the conspiracy theory,the two-way interactive relationship between government and enterprises and banks and enterprises was used to demonstrate the formation of zombie firms and zombies lending,which not only enriched the relevant literature of zombie firms,but also injected new vitality into the conspiracy theory.Secondly,based on China's reality,the issue of zombie lending was introduced into the field of new political economy,and the role of government-enterprise conspiracy and government intervention in the bank-enterprise conspiracy relationship was tested.Thirdly,from the perspective of financial supervision,it provides empirical evidence for in-depth analysis of the formation mechanism of bank-enterprise collusion and zombie lending.Overall,based on the perspective of bank-enterprise conspiracy,this paper analyzes the formation mechanism of zombie firms and zombies lending in China through theoretical deduction and empirical research.This is to clarify the role of the government and banks in the clearing of zombie firms and the deep-seated reasons for the mismatch of credit resources in China effectively improve the efficiency of financial services in the real economy and promote structural reforms on the financial supply side to provide empirical support and decision-making references.At the same time,there are still some problems in this article that need to be resolved,such as further finding and identifying ways and degrees of collusion relations between government and enterprises,banks and enterprises;what specific impact does zombie lending have on overall economic output and the efficiency of resource allocation? These are also the contents to be studied and improved.