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Non-Financial Enterprises’ Shadow Banking Business and Total Factor Productivity of Enterprises

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  • Chen Yang

    (Department of Business Management, School of Management, Xiamen University, Xiamen 361005, China)

  • Weitao Shen

    (Department of Business Management, School of Management, Xiamen University, Xiamen 361005, China)

Abstract

This study empirically analyzes the impact of the shadow banking business (SBB) of non-financial enterprises (non-FEs) on the total factor productivity (TFP) of enterprises using data concerning non-FEs listed in China’s A-share market from 2008 to 2019. The results show that non-FEs’ SBB has a significantly negative impact on their TFP, and for every 10% increase in the involvement of non-FEs in SBB, their TFP decreases by 4.22% on average. The negative effect is more significant in the period of loose monetary policy, lower industry competition, and non-state-owned enterprises. Alleviating financing constraints, reducing information asymmetry, and optimizing financial resource allocation may mitigate the negative effect. Our study reveals the mechanism by which non-FEs’ SBB inhibits their TFP. These findings enrich the theoretical research on the two, and provide empirical evidence to alleviate the “off real to virtual” of the economy and promote long-term, high-quality and sustainable economic development.

Suggested Citation

  • Chen Yang & Weitao Shen, 2022. "Non-Financial Enterprises’ Shadow Banking Business and Total Factor Productivity of Enterprises," Sustainability, MDPI, vol. 14(13), pages 1-19, July.
    • Handle: RePEc:gam:jsusta:v:14:y:2022:i:13:p:8150-:d:855388
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