Research On The Impact Of Leverage To The Valuation Of Listed Commercial Banks In China

Following the 2008 financial crisis,much attention has been devoted to the balance sheets of banks.Large bailouts carried out with taxpayers' money have pushed regulators to take a more conservative approach to bank risk,forcing them to hold more equity and introducing new short run and long run liquidity ratios.The regulators' purpose is to reduce banks' bankruptcy probability and the associated disruptions with the real economy,among which are costly bailouts and financial distress to non-financial firms highly dependent on bank credit.However,while the negative externalities created by bank insolvency have been studied at length in the literature,especially after the 2008 financial crisis,there has been less attention to empirical estimates of the optimalcapital structure for banks.This is the topic under examination in this paper.This paper learned from previous studies and seek the optimal leverage ratio fora bank from sharers' view,selected the panel data of our 14 commercial banks in 2007 to 2015,then used CAPM model and GLS model to calculate the residual income,combining the panel threshold regression model to analyze the correlation between commercial banking leverage and residual income.The results show that commercial banks' leverage and residual income have a nonlinear relationship.This article is organized as follows:The first chapter is an introduction section which introduces the background and the status of research in this field,summed up the inadequacies,then to establish research proposition.The second chapter is the section of theoretical analysis,this chapter selects and introduces CAPM model,GLS model and residual income model data and put forward the testing hypotheses.The third chapter is empirical analysis section,the first to use CAPM model,GLS model and residual income model to calculate the residual income of 14 sample banks;secondly introduces the threshold regression theory,use Stata12.1 software carried out grid search method,to test the threshold effect;finally,using the panel threshold regression model make a regression analysis and describing its results.The fourth chapter is the conclusion.