A Study On The Influence Of Shadow Banking Business To Financing Cost Of Corporate Debt

The generation and development of shadow banking is basically the demand of entity economy.As a double edged sword,shadow banking enriches the traditional financing methods for micro enterprise who is looking for capital support,however,it also creates a good atmosphere for some particular behaviors like financial institutions'business nesting,which undoubtedly deteriorate the overall environment of the corporate financing.That is why regulators focuses on shadow banking and 3 targeted regulations have been enforced since 2007.Based on this background,this essay tries to make some assessments of the policy's practical market effects,figure out the particular connection between the scale of shadow banking and different financing cost for each enterprise who looks for support from the capital market.In order to figure out the relationship between shadow banking and corporate financing cost in more comprehensive dimensionalities,based on the main theory of social welfare economics,this essay tries to build the financing efficiency index to calculate the implicit financing cost,which measuring the financing difficulty.Then,this implicit cost index is added to the measurement system of financing cost,reflecting the overall cost for each enterprise.Based on the new assessment methodology,using the method of robust least square analysis and impulse response,we discuss the relationship between shadow banking scale,virtual variables for policy implementation,and the different financial cost for each micro enterprises.The research result shows that the construction of implicit financing cost index has positive theoretical and empirical meaning.The promulgation and implementation of the policy,by having negative impact on the scale of the shadow banking business,restricts the financing ways for enterprises and increases the implicit financial cost of micro corporates.However,it weakens the business relationship between traditional commercial banks and non-bank financial institutions,shorten the loan business chain and optimize the overall environment for enterprise financing market,which reducing the explicit financing cost as a result.In general,the implementation of the policy and the limitation of the scale of shadow banking business make the total cost of enterprise financing significantly decrease.Besides,this influence has positive and long term meaning for the whole capital market environment.Based on these conclusions,this paper puts forward the following policy suggestions.Firstly,keep rational attitude towards shadow banking development,complete the connotation of the regulatory system.Secondly,restrict the shadow banking business moderately,reduce financial leverage for the sake of preventing virtual economic development.