We define and quantify for the first time over-credit at the firm level, which refers to the case in which the amount of bank credit that a firm obtains exceeds its expenditure on corporate investment for the year. Th...We define and quantify for the first time over-credit at the firm level, which refers to the case in which the amount of bank credit that a firm obtains exceeds its expenditure on corporate investment for the year. Then, we explore how over-credit affects corporate investment to determine whether credit expansion in China is consistent with the principle of finance serving the real economy. The results show that over-credit promotes firm investment, and this effect was enhanced by the housing boom. However, the effect of the property market reversed after 2012, owing to China＇s economic transition from a quantitative to a structural mismatch between supply and demand. Finally, we explore how over-credit affects the capacity utilization ratio and whether it has aggravated the overcapacity problem in China. The results show that over-credit reduces firms＇ capacity utilization ratio. This finding indicates that excessive credit expansion has exacerbated the overcapacity problem in China.展开更多
In this paper we assess the causal relationship between international crude oil price changes and the RMB exchange rate using daily information from 21 July 2005 to 5 April 2017.In addition to linear causality tests,w...In this paper we assess the causal relationship between international crude oil price changes and the RMB exchange rate using daily information from 21 July 2005 to 5 April 2017.In addition to linear causality tests,we employ quantile causality test to.identify prior imperceptible causplity in quantiles.We find a causal relationship from crude oil price to exchange rate at each quantile interval,but the reverse only appears in tail.This may help to explain why a traditional linear test fails to capture the causality from exchange rate to crude oil price as the quantile causalities in tails are canceled out by each other:Moreover;using RMB as the settlement currency in crude oil trade can weaken the prior significant causal relationships between crude oil price and exchange rate,whereas the reform of exchange rate marketization reignites the tail causalities from exchange rate to crude oil price.These findings recommend a wider use of domestic currencies in crude oil trade to avoid risk from the crude oil market.展开更多
文摘We define and quantify for the first time over-credit at the firm level, which refers to the case in which the amount of bank credit that a firm obtains exceeds its expenditure on corporate investment for the year. Then, we explore how over-credit affects corporate investment to determine whether credit expansion in China is consistent with the principle of finance serving the real economy. The results show that over-credit promotes firm investment, and this effect was enhanced by the housing boom. However, the effect of the property market reversed after 2012, owing to China＇s economic transition from a quantitative to a structural mismatch between supply and demand. Finally, we explore how over-credit affects the capacity utilization ratio and whether it has aggravated the overcapacity problem in China. The results show that over-credit reduces firms＇ capacity utilization ratio. This finding indicates that excessive credit expansion has exacerbated the overcapacity problem in China.
基金The authors are grateful for financial support from the National Natural Science Foundation of China(No.71703086)the National Social Science Fund of China(No.18AZD010)the Program for Innovative Research Team of Shanghai University of Finance and Economics.
文摘In this paper we assess the causal relationship between international crude oil price changes and the RMB exchange rate using daily information from 21 July 2005 to 5 April 2017.In addition to linear causality tests,we employ quantile causality test to.identify prior imperceptible causplity in quantiles.We find a causal relationship from crude oil price to exchange rate at each quantile interval,but the reverse only appears in tail.This may help to explain why a traditional linear test fails to capture the causality from exchange rate to crude oil price as the quantile causalities in tails are canceled out by each other:Moreover;using RMB as the settlement currency in crude oil trade can weaken the prior significant causal relationships between crude oil price and exchange rate,whereas the reform of exchange rate marketization reignites the tail causalities from exchange rate to crude oil price.These findings recommend a wider use of domestic currencies in crude oil trade to avoid risk from the crude oil market.
