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Bank Runs in China: Evidence from a Dynamic Panel Model

Author

Listed:
  • Xuefang Liu
  • W. Robert J. Alexander
  • Sajid Anwar

Abstract

The rise of China as a global economic power has caused concern that a crisis in Chinese banking could lead to a worldwide downturn similar to the Global Financial Crisis. Early warning indicators, such as the credit-to-GDP gap and the debt service ratio, are worrying. It is, therefore, worthwhile to study the key factors affecting bank deposits in China. We estimate a dynamic panel model applied to a panel of 63 Chinese banks and find that bank-specific fundamentals, as opposed to macroeconomic factors, are the main drivers of changes in bank deposits. JEL: E44, G21, G28

Suggested Citation

  • Xuefang Liu & W. Robert J. Alexander & Sajid Anwar, 2018. "Bank Runs in China: Evidence from a Dynamic Panel Model," Arthaniti: Journal of Economic Theory and Practice, , vol. 17(1), pages 15-30, June.
    • Handle: RePEc:sae:artjou:v:17:y:2018:i:1:p:15-30
    DOI: 10.1177/0976747918773128
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    More about this item

    Keywords

    China; bank runs; bank fundamentals; macroeconomic factors; Arellano–Bond model;
    All these keywords.

    JEL classification:

    • E44 - Macroeconomics and Monetary Economics - - Money and Interest Rates - - - Financial Markets and the Macroeconomy
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages
    • G28 - Financial Economics - - Financial Institutions and Services - - - Government Policy and Regulation

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