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The 289th Wenlan Financial Forum
Topic： | Revisiting Banking Competition and Fragility: a “Too Big to Save”Perspective |
Speaker: | Yu Xiao, Assistant Professor Institute of Financial Studies, Southwestern University of Finance and Economics |
Host： | Zhao Li, Associate Professor School of Finance, Zhongnan University of Economics and Law Innovation and Talent Base for Digital Technology and Finance |
Time: | 14:00-15:30, Thursday, November 2, 2023 |
Location: | South 106 Conference Room, Wenquan Building, ZUEL |
Abstract：
We study the role of firm heterogeneity in state-ownership and productivity in monetary policy transmission in China. Empirically, we document that the impact of monetary supply shocks on firms' risk premia and corporate decisions varies substantially both within and across state-owned enterprises (SOEs) and private-owned enterprises (POEs). We develop and estimate a dynamic heterogeneous firm model with monetary supply shocks and financial frictions to interpret the empirical findings. The model shows that more severe frictions in accessing debt markets for POEs exacerbates capital misallocation in times of contractionary monetary shocks, leading to sizable losses in aggregate productivity and output.
Speaker Introduction：
Xiao Yu is an assistant professor at the Institute of Finance Studies, Southwestern University of Finance and Economics. He received his Ph.D. from Rutgers University in 2022. His research interests include macroeconomics, monetary and banking, and financial stability. The research achievement was given the opportunity to revise and resubmit to European Economic Review.