Can asset-backed securitisation reduce corporate leverage? Evidence from China
Ronghui Pang
Shanghai Publishing and Printing College, Shanghai, China
Search for more papers by this authorCorresponding Author
Yanan Zhang
School of Economics, Institute for Study of Brain-like Economics, Shandong University, Jinan, China
Correspondence
Yanan Zhang and Jianbiao Li, School of Economics, Institute for Study of Brain-Like Economics, Shandong University, Jinan, China.
Email: [email protected] and [email protected]
Search for more papers by this authorCorresponding Author
Jianbiao Li
School of Economics, Institute for Study of Brain-like Economics, Shandong University, Jinan, China
Correspondence
Yanan Zhang and Jianbiao Li, School of Economics, Institute for Study of Brain-Like Economics, Shandong University, Jinan, China.
Email: [email protected] and [email protected]
Search for more papers by this authorShaopeng Xie
Faculty of Economics and Management, East China Normal University, Shanghai, China
Search for more papers by this authorRonghui Pang
Shanghai Publishing and Printing College, Shanghai, China
Search for more papers by this authorCorresponding Author
Yanan Zhang
School of Economics, Institute for Study of Brain-like Economics, Shandong University, Jinan, China
Correspondence
Yanan Zhang and Jianbiao Li, School of Economics, Institute for Study of Brain-Like Economics, Shandong University, Jinan, China.
Email: [email protected] and [email protected]
Search for more papers by this authorCorresponding Author
Jianbiao Li
School of Economics, Institute for Study of Brain-like Economics, Shandong University, Jinan, China
Correspondence
Yanan Zhang and Jianbiao Li, School of Economics, Institute for Study of Brain-Like Economics, Shandong University, Jinan, China.
Email: [email protected] and [email protected]
Search for more papers by this authorShaopeng Xie
Faculty of Economics and Management, East China Normal University, Shanghai, China
Search for more papers by this authorAbstract
Although Chinese regulatory authorities view corporate asset-backed securitisation as a powerful tool for deleveraging, its effectiveness remains unexamined. Employing a look-through approach to data from nonfinancial corporate asset-backed securitisation transactions in China, we identify the actual originators and examine the impact of corporate asset-backed securitisation on their leverage ratios. Regrettably, we find that corporate asset-backed securitisation significantly increases the leverage ratio. This result holds true across both state-owned and non-state-owned enterprises, as well as large-scale and small-scale enterprises. Finally, this study reveals that the effect of corporate asset-backed securitisation on the leverage ratio is partially mediated by internal financing capacity.
Open Research
DATA AVAILABILITY STATEMENT
Data available on request from the authors.
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