The Supply of Shadow Banking, Bank Competition, and Real Investment in China
Published: 7 August 2026| Version 4 | DOI: 10.17632/rgr65vc94x.4
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Using a model of firms’ capital allocation under symmetric and asymmetric funding constraints that accounts for the moderating role of firms’ capital structure, we show how bank competition changes firms’ incentive structure toward real economic activity, thereby reducing their supply of shadow banking capital.
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Banking, Corporate Finance