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【4.13 Seminar】Qi Sun: The Real Effects of Entrusted Lending
2018-04-12
The Real Effects of Entrusted Lending
Time: 4:00pm -5:30pm, Apr 13, 2018
Venue: Room 359S, Overseas Exchange Center, Peking University
Speaker: Qi Sun (Shanghai University of Finance and Economics)
【Abstract】
I develop a two-sector equilibrium model of entrusted lending in China, in which state sector firms with privileged access to credit provide entrusted loans to private sector firms with limited access to credit. I show that in a stationary state entrusted lending improves capital allocation by channeling funds to more productive private firms. However, during a bank credit expansion, new loans have been allocated more disproportionately toward state firms through an amplification effect induced by entrusted lending. On the other hand, the channel of entrusted lending boosts the transmission efficiency of credit stimulus by enlarging the impact of credit expansion on output growth. I also show that a partial liberalization of the state sector's borrowing constraint could lead to a lower efficiency of capital allocation, by a crowding out effect of raising the marginal cost of bank lending. Finally, the model presents a quantitative explanation for the dramatic increase of entrusted loans since 2010.
【Speaker】
Qi Sun is an Assistant Professor of Finance at Shanghai University of Finance and Economics. His research interests are macroeconomics, corporate finance and Chinese economy. His research has been published in Journal of the European Economic Association and Journal of Financial Economics. Professor Sun received his Ph.D. in Economics degree from the University of Southern California in 2014.