The Economic Effect Of Non-financial Enterprises’ Shadow Banking Activities

With China’s economy has entered a structural adjuetment stage,the problems of market demand shrink,excessive traditional industry overcapacity and zombie enterprises disposal have become increasingly prominent.However,under the background of long-term weakness of real economy and declining of entity investment return rate,financial sector has shown a rapid growth trend which is deviated from the real economy.On one hand,finance has been gradually alienated from the original intention of serving entity economy,through financial innovation,product nesting and other ways to break through financial supervision,trying to conceal the nature of financial transaction,and making caital idle within the financial system.On the other hand,entity sector has been deviated from the main business,and engaged in stocks,bonds,and other quasi financial asset investment activities under high margin interest of financial industry,which have aggravated induatrail hollowing trend.According to Wind statistics,767 listed companies have bought bank financial products,security company financial products,trust loans,private equity funds,and other quasi financial products in 2016,total sum has arrived 726.876 billion yuan.What is worthy of our attention,under the background of credit discrimination,undeveloped capital market and insufficient financial supervision,more and more non-financial enterprises take advantage of diversified financing channels,have been financing funds from financial intermediary and capital market,and then engaging in shadow banking activities through entrusted loans,entrusted financial products,bridge loans and other ways,which have been the configurator of shadow credit funds.Nonfinancial sector has become an important and special participant of shadow banking business after banks,security companies,insurance companies and other formal financial institutions,small loan companies,financing guarantee corporations,asset management corporations and other quasi financial institution.Non-financial enterprises’ shadow banking activities actually belong to the category of enterprises’ financialization,but the characteristics of high leverage,high risk and unclear legal credit subject of shadow banking,have made enterprises’ shadow banking activities different from stock,bond and other traditional financial asset investment behavior.On one hand,compared to financial institution,enterprise sector has poor ability in terms of effective recognition,objective evaluation and timely response of credit risk,the characteristics of pro-cyclicality,high leverage and high risk of shadow banking will inevitably have impact on micro enterprises’ operating performance and operating risk.On the other hand,non-financial enterprises devote too much energy and resources into shadow credit market,will evitably lead to the inhibition of production and innovation activities,and aggravate industry hollowing and economy “Divorce from real economy to virtual eoonomy” trend,thus having a negative effect on social welfare level and macro-economy stability.As a result,pay attention to non-financial enterprises’ shadow banking activities,explore the business model of nonfinancial enterprises’ shadow banking activities,put forward calculation method of enterprises’ shadow banking,and research the influence factors and economic performance of enterprises’ shadow banking activities,having important theory and practical significance of re-examining diversified shadow credit market,improving existing shadow banking estimation system,restraining excessive expansion of enterprises’ shadow banking scale,and realizing long-term steady development of macro-economy.In order to further complement and perfect the existing research on shadow banking system,this paper following research idea of from theoretical analysis to empirical analysis,and then to policy recommendations.The paper firstly defines the concept of non-financial enterprises’ shadow banking activities from the theoretical level,explore the internal mechanism of enterprises’ shadow banking business,and on the basis of existing literature research,put forward the motivation contribution factors and economic results of enterprises’ shadow banking activities.Secondly,using listed companies’ data in Chinese Shenzhen and Shanghai Stock Market,empirically analyze the micro-economic effect of enterprises’ shadow banking business,that is,the impact on operating performance and operating risk.Then,we explore the effect of non-financial enterprises’ shadow banking activities on output growth under the background of bank credit discrimination,and the influence mechanism of financial mismatch on non-financial enterprises’ shadow banking activities.Finally,we put forward policy recommendation of restraining enterprises’ excessive shadow banking behavior,preventing “Industry Hollowing” trend,and promoting finance return to real economy.The study results conclude that,firstly,non-financial enterprises engage in shadow banking business,mainly through “Substantial Credit Intermediary” model of entrusted loans,entrusted financial products,and private lending,and “Indirect Shadow Credit Participation” means of buying bank financial products,security company financial products,structural deposits,private equity funds and other quasi financial products.Secondly,enterprises’ shadow banking activities will be affected by external financing ability,the difference between financial yield rate and entity economy investment yield rate,macroeconomic environment and micro enterprise heterogeneity factors.Thirdly,overall,enterprises’ shadow banking activity will improve operating performance.In addition,from the perspective of earning structure,nonfinancial enterprises’ shadow banking business increases financial benefits,but has a significantly negative effect on operating income.Among them,the negative effect of investment crowding out on operating income is greater than that of efficiency-improving effect on operating income.Fourthly,non-financial enterprises’ shadow banking activities will increase operating risk,when enterprises act as substantial credit intermediary through means of entrusted loans,entrusted financial products and private lending,financing funds for capital demanders,the borrower’s repayment risk will transmit to the lenders through “Account account Conduction” mechanism,thus increase operating risk.When enterprises indirectly participate in shadow credit market chain,through purchasing shadow credit products,financial market risk will be transferred to enterprise through “Systematic Risk Linkage” mechanism,and thus aggravate business risk.Fifthly,bank ownership discrimination is the main reason of non-financial enterprises’ shadow banking activities,and only in the situation of financing disadvantage enterprises’ production efficiency is higher than shadow credit market interest rate,financiang advantage departments’ shadow banking activities represented by state-owned enterprises will exist,and thus promote the improvement of the whole social output level.Sixthly,financial mismatch promotes enterprises’ shadow banking activites,and the effect has regional and enterprise hereogenity.The mediator effect test found that,financial mismatch acts on enterprises’ shadow banking activities mainly through financing constraints and entity investment scale,and not capital return rate channel.Seventhly,a series of policies of restraining shadow banking activities from the asset side of bank,security and other mainstream financial institutions issued by the regulatory authority sector,is difficult to curb excessive development of informal credit market.Eliminate credit discrimination,achieve efficient allocation of financial resources,vigorously develope direct financing market,and perfect the penetrating supervision of regulatory department and disclosure mechanism of financial statements,in order to eliminate enterprises’ excessive shadow banking behavior,and promote finance return to the original intention of servicing real economy.The paper mainly includes the contents of six chapters.The paper framework is as follows:The first chapter is research background and research significance.The paper first puts forward research problem of non-financial enterprise and research significance under the background of high leverage rate,financial asset investment chaos and entity investment rate decline.Then sort out the relevant literatures of the emergence,scale estimation,driving factors and the influence on the economic operation of shadow banking,and the business mechanism,motivation and influence of non-financial enterprises’ shadow banking business,and make objective comments on the contributions and shortcomings of existing literature research,and thus put forward the research contents,research ideas and research methods.Finally illustrate the outstanding innovation and possible shortcomings of this paper compared with the existing research and following reseach area.The second chapter is the theoretical mechanism analysis of non-financial enterprises’ shadow banking activities,this paper first defines the concept of non-financial enterprises’ shadow banking business.Secondly,summarize the business mode and estimation method of enterprises engaging in shadow banking activities,then explore driving factors of enterprises’ shadow banking activities motivation.Finally,analyze the economic results of enterprises’ shadow banking business.The third chapter is influencing factors analysis of non-financial enterprises’ shadow banking activity.This part first analyzes the influence factors of enterprises’ shadow banking activity from view of financing structure,the difference between financial return rate and entity return rate,external macroeconomic environment and micro firm heterogeneity,and put forward corresponding research hypothesis.Secondly,construct empirical model,and do empirical analysis of influencing factors of enterprises’ shadow banking activities taking advantage of listed companies’ data.Then,further explore zombie enterprises and stated-owned companies compared to non-zombie enterprises and non-stated owned enterprises,its shadow banking scale change sensitivity to external financing capability,and difference between finance yield rate and entity yield rate.Finally,according to the conclusions of this chapter,providing policy guidance for the regulatory authorities to standardize enterprises’ finanancing and investment behavior,restrain excessive development of shadow banking sysyem,and promote smooth operation of macro economy.The fourth chapter is the microeconomic effect of non-financial enterpsies’ shadow banking activities,respectively explore the impact of non-financial enterprises’ activities on operating performance and operating risk.This part analyzes the impact of non-finacial enterprises’ shadow banking scale on operating performance from view of overall and profit structure.Then use mediator effect model to explore the mechanism of enterprises’ shadow banking activities on operating income from investment scale and investment efficiency.For the relationship between non-finacial enterprises’ shadow banking business and operating risk,the paper first explores the impact of enterprises’ shadow banking activities on operating risk,and the risk contagious mechanism if enterprises participat in shadow banking activities under different models from the therotical view.Then taking advanteage of listed companies’ data,using panel fixed effect model and interactive regression method,to do empirical test of transmission mechanism between enterprises’ shadow banking activies and operating risk.Finally,give the policy suggestion of buiding risk isolation mechanism,reduding systemic financial risk,and promoting financial stablility.The fifth chapter is the macroeconomic effect of non-finanical enterprises’ shadow banking activities.This charpter respectively explores the effect of non-financal enterprises’ shadow banking activities on output level under the view of bank credit discrimination,and the relationship among financial mismatch,non-financial enterprises’ shadow banking activities and economy “Divorce from entity economy to virtual economy”.For the study of bank ownership discrimination,non-finanical enterprises’ shadow banking activitie and output growth,this part first constructs two sector model concluding bank discrimination,to analyze the generating mechanism of non-financial enterprises’ shadow banking business from therotical level,gradually relax the assumption based on the bechamrk model,and further investigate the fund financing behavior,respective output,profit function and overall economic output between financing advantage sector and financing disadvantage sector.Next,using China’s non-financial listed companies’ data to empiricaly test the impact of ownership discrimination on financing advantage departments’ shadow banking trend representatived by state-owned companies.Then,taking advantage of provincial panel data and PVAR model to explore the influence of non-financil enterprises’ shadow banking activities on output growth.Finally,put forward policy recommendatios of eliminating credit discrimination,improve entity investment environment and accelerate the supply side reform in financial area.For the research between financial mismactch and non-financail enterprises’ shadow banking business,the paper firstly analyzes the influence mechanism of inefficient allocation of financial resources on enterprises’ shadow banking scale from the view of financial misatch and put forward corresponding therotical hypothesis.Then use panel fixed effect model and mediator effect model to do empirical analysis between the relationship of financial mismatch and enterprises’ shadow banking activities.Finally,we further explore the impact of non-financial enterprises’ shadow banking business on economy “Moving from real economy to virtual economy”.The sixth chapter is the conclusion and policy suggestion part.The paper based on literature review,theoretical mechanism analysis and empirical tests,creatively proposes the business mechanism,influence factor,and macro and micro economic effect of enterprises’ shadow banking activities.We put forward the policy recommendations of curbing enterprises’ excessive shadow banking behavior,reducing risk linage between financial and real sector,and prevent economy “Divorce from Real Economy to Virtual Economy”.