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SWUFE Professor Published Article in Top International Journal of Financial Economics

Recently, an academic paper titled Entrusted loans: A close look at China's shadow banking system, written by Prof. XU Guoqian as a correspondence author form School of Accounting, was published in Journal of Financial Economics(2019 Vol.7), an international top journal in the field of finance.

By analyzing 2995 entrusted loans of listed companies, the paper has made an in-depth research of causes, efficiency and consequences of entrusted loans as shadow banking business. The paper holds that the entrusted loan is a financing service provided by companies with financing advantages to the disadvantaged, and the entrusted loan is more likely to occur when the credit is tight. Shadow banking is a rational response of companies to the failure of meeting financing needs of small and medium-sized enterprises through formal finance channels. The entrusted loan business engaged by companies is decided upon its own and the market environment, and the entrusted loan interest rate fully reflects borrowers’ risk. Generally speaking, the entrusted loan business is efficient and the risk is relatively low. This paper is the first one to dig into the causes and efficiency of entrusted loans from the transaction level, which would improve people's understanding of shadow banking.

In recent years, SWUFE has continuously conducted a reform of the scientific research evaluation system, optimized the catalogue of academic journals, increased the rewards for outstanding achievements, actively guided teachers to carry out high-level scientific researches and produce high-level research achievements with international influence, which all have laid a solid foundation for enhancing SWUFE’s international academic influence and speeding up the construction of world-class disciplines.



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