Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking

This paper provides an empirical analysis of the factors that determine the profitability of Chinese shadow banks from the year 2006 to 2013. The tested sample includes 10 investment banks, 10 trust companies and 8 securities companies. There are two dependent variables including return on average a...

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Main Author:	Cao, Kangquan
Format:	Dissertation (University of Nottingham only)
Language:	English
Published:	2014
Online Access:	http://eprints.nottingham.ac.uk/27429/ http://eprints.nottingham.ac.uk/27429/1/Final_dissertation_Kangquan_Cao.pdf

id	nottingham-27429
recordtype	eprints
spelling	nottingham-274292017-10-19T21:55:33Z http://eprints.nottingham.ac.uk/27429/ Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking Cao, Kangquan This paper provides an empirical analysis of the factors that determine the profitability of Chinese shadow banks from the year 2006 to 2013. The tested sample includes 10 investment banks, 10 trust companies and 8 securities companies. There are two dependent variables including return on average assets (ROAA) and return on average equity (ROAE). The results, obtained by applying the system-GMM estimator to the panel of 28 shadow banks, indicate that bank-specific factors and external factors have significant relations to shadow banks profitability: company with higher capital adequacy, which is measure as equity-to-asset ratio, tends to have higher profitability; cost-to-income ratio that measures management efficiency has positive relationship with profitability; liquidity and size of shadow bank perform a negative relation to profitability, which is opposite to the expected direction. In terms of external factor, GDP growth rate, inflation and interest rate are all presenting a positive relationship with profitability. The bank asset-to-GDP ratio (ASSGDP) is surprisingly showing a positive relationship with profitability, which indicates that the Chinese shadow banking industry arguably remains under developed and relatively lower inter competitions. 2014-08-18 Dissertation (University of Nottingham only) NonPeerReviewed application/pdf en http://eprints.nottingham.ac.uk/27429/1/Final_dissertation_Kangquan_Cao.pdf Cao, Kangquan (2014) Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking. [Dissertation (University of Nottingham only)] (Unpublished)
repository_type	Digital Repository
institution_category	Local University
institution	University of Nottingham Malaysia Campus
building	Nottingham Research Data Repository
collection	Online Access
language	English
description	This paper provides an empirical analysis of the factors that determine the profitability of Chinese shadow banks from the year 2006 to 2013. The tested sample includes 10 investment banks, 10 trust companies and 8 securities companies. There are two dependent variables including return on average assets (ROAA) and return on average equity (ROAE). The results, obtained by applying the system-GMM estimator to the panel of 28 shadow banks, indicate that bank-specific factors and external factors have significant relations to shadow banks profitability: company with higher capital adequacy, which is measure as equity-to-asset ratio, tends to have higher profitability; cost-to-income ratio that measures management efficiency has positive relationship with profitability; liquidity and size of shadow bank perform a negative relation to profitability, which is opposite to the expected direction. In terms of external factor, GDP growth rate, inflation and interest rate are all presenting a positive relationship with profitability. The bank asset-to-GDP ratio (ASSGDP) is surprisingly showing a positive relationship with profitability, which indicates that the Chinese shadow banking industry arguably remains under developed and relatively lower inter competitions.
format	Dissertation (University of Nottingham only)
author	Cao, Kangquan
spellingShingle	Cao, Kangquan Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking
author_facet	Cao, Kangquan
author_sort	Cao, Kangquan
title	Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking
title_short	Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking
title_full	Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking
title_fullStr	Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking
title_full_unstemmed	Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking
title_sort	shadow banks and profitability: an empirical analysis of china’s shadow banking
publishDate	2014
url	http://eprints.nottingham.ac.uk/27429/ http://eprints.nottingham.ac.uk/27429/1/Final_dissertation_Kangquan_Cao.pdf
first_indexed	2018-09-06T11:43:54Z
last_indexed	2018-09-06T11:43:54Z
_version_	1610858348817678336

Shadow Banks and Profitability: An Empirical Analysis of China’s Shadow Banking

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