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Private capital holding, financial awareness of government and steadying operation of banks: Evidence from China

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  • Kun Xu
  • Jie Liu
  • Jiarong Li

Abstract

Based on the panel data of 123 city commercial banks in China from 2007 to 2017, we use the dynamic panel system GMM estimation method to empirically test the impact of private capital holdings on the stability of city commercial banks. The results show that private capital holding improves the operating performance of city commercial banks, reduces the volatility of return on total assets, and is conducive to the stability of city commercial banks. Furthermore, the lack of financial awareness of local governments has led to the negative impact of private capital, that is, the stability of the banks has declined.

Suggested Citation

  • Kun Xu & Jie Liu & Jiarong Li, 2023. "Private capital holding, financial awareness of government and steadying operation of banks: Evidence from China," PLOS ONE, Public Library of Science, vol. 18(5), pages 1-15, May.
    • Handle: RePEc:plo:pone00:0285588
    DOI: 10.1371/journal.pone.0285588
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