Bank-enterprise Connection And Non-financial Enterprises’ Shadow Banking Business

In recent years,China’s economic development has entered a new normal.The economy has shifted from a stage of high-speed growth to a stage of high-quality development.The overall economic growth rate has slowed.Objective factors such as license management have led to higher entry barriers in the financial industry,and the profit rate of the financial sector continues to be higher than that of the industrial sector.At the same time,due to the imperfect financial system,there is an uneven distribution of credit in China.In this context,many entity companies with financing advantages turn to the "shadow banking" system,which uses entrusted loans,entrusted financial management and private lending to lend funds to small,medium and micro enterprises and other financing disadvantaged parties in order to capture high interest rate spread income.Since most of its businesses are in regulatory blind spots,and many entities have insufficient awareness of their own risks and relatively weak awareness of compliance,they have brought huge risks to the enterprises themselves and the financial system.Therefore,it is necessary to study what factors promote non-financial companies to engage in excessive shadow banking business.This article starts with the establishment of bank-enterprise connection by hiring bank professional background executives or holding bank shares,and studies whether bank-enterprise connection are more engaged in corporate shadow banking and the influence of enterprise scale,property rights and internal governance;and further explore the economic consequences of corporate shadow banking brought about by bank-enterprise connection.Through empirical research,this article draws the following conclusions:1.Bankenterprise connection are more engaged in shadow banking services such as entrusted loans,entrusted financial management and private lending.This phenomenon exists in both equity and personnel connections;2.Large-scale enterprises and state-owned enterprise,the two types of non-financial enterprises that have financing advantages,are more likely to engage in shadow banking after the establishment of bank-enterprise connection.This also explains to a certain extent that the financing constraint gap caused by the unequal distribution of credit resources is the rise of corporate shadow banking;3.Among companies with more serious principal-agent problems(low shareholding ratio of senior executives),bank-enterprise connection are more likely to engage in shadow banking business,indicating that the principal-agent problem is also one of the factors that companies engage in shadow banking business.4.The professional support brought by the bank-enterprise connection does not make shadow banking business to play its role as a "reservoir".The high-risk characteristics of shadow banking business have increased the business risks of enterprises.Based on the above findings,this article puts forward the following research recommendations:First,improve the financial system and establish multi-level corporate financing channels;second,strengthen the supervision of shadow banking business,focus on identifying sources of funds,and prevent non-financial companies from excessively participating in shadow banking business;Third,companies should focus on their main business,improve information disclosure,and strengthen internal governance.