Back to Search
Start Over
The impact of bank's engagement in shadow banking activities on bank's sustainability: Evidence from Chinese commercial banks.
- Source :
-
Environmental science and pollution research international [Environ Sci Pollut Res Int] 2023 Apr; Vol. 30 (19), pp. 54979-54992. Date of Electronic Publication: 2023 Mar 07. - Publication Year :
- 2023
-
Abstract
- The economic and environmental consequences of bad banking practices have aroused much attention. In China, banks are at the center of shadow banking activities through which they avoid regulation and support environmentally unfriendly businesses such as fossil fuel companies and other high-pollution enterprises. In this paper, we study the impact of bank's engagement in shadow banking activities on its sustainability by using annual panel data of Chinese commercial banks. The result shows that bank's engagement in shadow banking activities has a negative impact on its sustainability and the negative impact of bank's engagement in shadow banking activities is more pronounced for city commercial banks and unlisted banks which are less regulated and lack corporate social responsibility (CSR). Furthermore, we explore the underlying mechanism of our findings and prove that bank's sustainability is impeded because it transforms high-risk loan into shadow banking activities which are less regulated. Finally, by using difference-in-difference (DiD) approach, we find that bank's sustainability improved after the financial regulation on shadow banking activities. Our research provides empirical evidence that the financial regulation on bad banking practices is beneficial for bank's sustainability.<br /> (© 2023. The Author(s), under exclusive licence to Springer-Verlag GmbH Germany, part of Springer Nature.)
- Subjects :
- China
Cities
Government Regulation
Social Responsibility
Sustainable Development economics
Sustainable Development legislation & jurisprudence
Banking, Personal economics
Banking, Personal ethics
Banking, Personal legislation & jurisprudence
Commerce economics
Commerce ethics
Commerce legislation & jurisprudence
Environmental Pollution economics
Environmental Pollution ethics
Environmental Pollution legislation & jurisprudence
Ethics, Business
Industry economics
Industry ethics
Industry legislation & jurisprudence
Sustainable Growth
Subjects
Details
- Language :
- English
- ISSN :
- 1614-7499
- Volume :
- 30
- Issue :
- 19
- Database :
- MEDLINE
- Journal :
- Environmental science and pollution research international
- Publication Type :
- Academic Journal
- Accession number :
- 36881234
- Full Text :
- https://doi.org/10.1007/s11356-023-25944-3