Journal of Guangxi Teachers Education University (Philosophy and Social Sciences Edition) ›› 2020, Vol. 56 ›› Issue (6): 146-162.doi: 10.16088/j.issn.1001-6597.2020.06.012

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Overcapacity, Local Government Intervention and Non-performing Loans of Commercial Banks——An Empirical Study Based on Provincial Panel Data

ZHOU Tian-yun   

  1. International School of Business & Finance,Sun Yat-sen University,Guangzhou 510275,China
  • Received:2020-07-23 Online:2020-11-25 Published:2020-12-01

Abstract: Based on the background of “overcapacity” in China's supply side reform,taking into account the influence of local government intervention,this paper 1) explores the causes of a new round of non-performing loans since 2009;2) analyzes the transmission mechanism between overcapacity and non-performing loans;3) employs the provincial panel data (2009-2016) to establish a dynamic panel model and take the generalized moment estimation of difference for empirically testing the new round of non-performing loans in China,and the relationship between overcapacity and non-performing loans.The findings tell 1) overcapacity and the non-performing loan ratio of commercial banks bear positive changes,and local intervention has been an important reason behind the new round of non-performing loans since 2009;2) China's overcapacity is featured with large-scale,multi-industry,and systemic financial risk concentration.In order to avoid risks and eliminate hidden dangers,it is necessary to improve the market exit channels,enhance the independence of credit approval decision-making links of commercial banks,and build a diversified performance evaluation index system for local officials,the paper points out in conclusion.

Key words: non-performing loans, commercial banks, overcapacity, local government intervention, financial risk

CLC Number: 

  • F424
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