Impact of ownership structure and ownership concentration on credit risk of Chinese commercial banks

Yang, Liu; Brahma, Sanjukta; Boateng, Agyenim

doi:10.1108/ijmf-03-2019-0094

Cited by 26 publications

(27 citation statements)

References 126 publications

(224 reference statements)

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“…This term refers to the percentage of government ownership in the company. The results (Liu et al, 2019) concluded that banks with high government ownership have low credit risk. In the same line, Oteros et al (2019) conducted a study to investigate the relationship between corporate governance and risk behavior in MENA countries' banking sector.…”

Section: Government Ownershipmentioning

confidence: 92%

“…In context, Liu et al (2019) conducted a study on Chinese commercial banks, and found that the banks with higher private ownership concentration have higher credit risks. Vintil and Gherghina (2014) argued that banks dominated by high concentrated ownership would tend to enter into risky investments due to shareholders' willingness to take more risk to influence the market value of shares to achieve higher profitability.…”

Section: Concentration Ownershipmentioning

confidence: 99%

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Ownership Structure as One of the Corporate Governance Tools and Banking Risks

Othman¹

2020

IJEBA

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Purpose: The current study aimed to test the effect of the ownership structure on banking risks of banks operating in the State of Qatar over the period (2008-2018). Design/Methodology/Approach: To measure the quality of the ownership structure and its effect on banking risks, special indicators were developed regarding the ownership concentration, government ownership, institutional ownership, and foreign ownership. The study used the contents analysis technique by deep study of financial and corporate governance reports published by the study sample as the main source data. To test this effect, the multiple linear regression models were designed using the OLS method. Findings: The study found that the banks operating in the state of Qatar have good ownership structures, which is reflected positively in reducing banking risks. Especially, the study found out that banks with high governance ownership proportion have low liquidity and credit risks. The study also found that banks with shareholders owning 5% or more have low liquidity and credit risks. Also, the existance of a high proportion of foreign investors decreases liquidity risks, while the increase in the share of foreign investors increases the credit risks. The study also found any increase in institutional ownership proportion in the bank leads to an increase in credit risk, while there is no effect of institutional ownership on bank liquidity risks. Originality/Value: The current study examines the ownership structure as one of the mechanisms of corporate governance, and the extent of its effect on reducing banking risks of the banks operating in the state of Qatar, which is considered one of the most important sectors affecting the economy.

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Section: Government Ownershipmentioning

confidence: 92%

Section: Concentration Ownershipmentioning

confidence: 99%

Ownership Structure as One of the Corporate Governance Tools and Banking Risks

Othman¹

2020

IJEBA

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“…Yang Liu et al (2019) examined the effects of bank ownership structure and ownership concentration on credit risk in their study. Using panel data on a sample of 88 Chinese commercial banks with 1194 observations over a period of 2003-2018, this study employs system generalised method of moments regression to examine the impact of bank ownership structure and ownership concentration on credit risk.…”

Section: Literature Reviewmentioning

confidence: 99%

Is Ownership Structure Effective in Taking Risks of Banks? The Case of Turkey

Köksal¹,

Babuşçu

Hazar

2020

Hitit Üniversitesi Sosyal Bilimler Enstitüsü Dergisi

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In this study, the relationship between the capital ownership and risk taking tendency of banks is analysed. The data of multi-branch deposit banks from the banks operating during the analysis period were included in the study. The data of each bank for the end of 2008-2017 are taken into consideration. A total of 2800 variables consisting of 14 different variables belonging to 20 deposit banks covering 10 years were used in the analysis. From the 20 banks taken into account in the analysis; 3 are public, 11 are domestic private and 6 are foreign banks with private capital. One of the most striking points in the study is that the derivative financial instruments / equity variable included in the analysis as an independent variable and 3 risk indicators are in a meaningful relationship. In the framework of the data obtained from the analysis, there was no effect of capital ownership and capital concentration on the risk taking tendency of the banks in the Turkish Banking Sector.

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“…In 2019, the economic growth of China was projected to be 6.2% due to a strong and stable traditional financial sector that could only be multiplied by the new 'One Belt One Road' initiative [4,5]. This tremendous current and future growth in the Chinese financial and banking sector requires a better understanding of their banking sector's systemic risk from a local and global standpoint [6,7] given the systemic risk spillover between China and other countries [8], especially that the growing Chinese economy cannot be sustained with fragile and backward banking infrastructure. In this paper, we intend to fill this gap by using three different distance-to-risk measures (Distance to default (DD), Distance to insolvency (DI), and Distance to capital (DC)) to empirically assess the domestic interbank linkages and systemic contagion in China, following the footsteps of [8,20].…”

Section: Introductionmentioning

confidence: 99%

Non-Traditional Systemic Risk Contagion within the Chinese Banking Industry

et al. 2021

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Systemic risk contagion is a key issue in the banking sector in maintaining financial system stability. This study is among the first few to use three different distance-to-risk measures to empirically assess the domestic interbank linkages and systemic contagion risk of the Chinese banking industry, by using bivariate dynamic conditional correlation GARCH model on data collected from eight prominent Chinese banks for the period 2006–2018. The results show a relatively high correlation among almost all the banks, suggesting an interconnectedness among the banks. We found evidence that the banking system is exposed to significant domestic contagion risks arising from systemic defaults. Given that Chinese markets deliver weak signals of forthcoming stress in banking sectors, new policy intervention is crucial to resolve the hidden stress in the system. The results have important policy implications and will provide scholars and policymakers further insight into the risk contagion originating from interbank networks.

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Impact of ownership structure and ownership concentration on credit risk of Chinese commercial banks

Cited by 26 publications

References 126 publications

Ownership Structure as One of the Corporate Governance Tools and Banking Risks

Ownership Structure as One of the Corporate Governance Tools and Banking Risks

Is Ownership Structure Effective in Taking Risks of Banks? The Case of Turkey

Non-Traditional Systemic Risk Contagion within the Chinese Banking Industry

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