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| Type | Master's Thesis |
| Scope | Discipline-based scholarship |
| Title | Uncertainty, financialization, and the bank lending channel in China |
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| Institution | University of Zurich |
| Faculty | Faculty of Business, Economics and Informatics |
| Date | 2023 |
| Abstract Text | This thesis investigates the bank lending channel in China from three perspectives: its overall impact on banks’ balance sheets (deposits and loans) and macroeconomic variables (production and financialization), the supply-side effect and the assumption of imperfect substitutability, and the external finance premium. Multiple VAR models are utilized, and the effects of uncertainty stemming from COVID-19 and lockdown measures are analyzed by comparing results across different sample periods. Using monthly data from January 2011 to December 2022, the findings demonstrate the existence of an efficient bank lending channel in China, with the main leakage occurring within the banking system rather than the stock market. The efficiency of the bank lending channel in altering banks’ balance sheets is undermined by the uncertainty associated with COVID-19 and lockdown measures. However, the assumption of imperfect substitutability is found to be invalid for firms without access to corporate bonds throughout the entire period. These results highlight the need for policymakers and researchers to place greater emphasis on the development of alternative transmission channels through financial markets and the improvement of regulations to achieve more effective policy implementation that impacts economic entities. I |
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