Systemic risk spillovers of nonfinancial firms: Does bank liquidity hoarding matter? Evidence from China
Year: 2025
Type: article
Abstract: Given the strong interdependencies between the economic and financial systems, nonfinancial firms have a significant impact on systemic risk. In this scenario, we examine the influence of bank liquidity hoarding on risk spillovers of nonfinancial firms, as it can impact firms' financing environment and operational conditions. Using data from 118 publicly listed Chinese companies between 2008 and 2021, we find that bank liquidity hoarding increases nonfinancial firms' risk spillovers, especially in the manufacturing and real estate industries. Furthermore, the path analysis results show that bank liquidity hoarding exacerbates extreme risk spillovers by increasing financing costs and intensifying corporate maturity mismatches. Moreover, the effect of bank liquidity hoarding is mitigated in firms with higher profitability and lower corporate financialization. This research bolsters the efficacy of macroprudential policies aimed at managing systemic risks amplified by bank liquidity hoarding within the financial and economic systems.
Authors: Bo Zhu, Yufei Zhang, Xiru Li, Xin Hu
Language: English
Subfield: Finance
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $1,930
Award: 基于经济金融关联网络的系统性风险动态监管机制研究
OpenAlex ID: W4413179092