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International Journal of Business Management and Economics and Trade, 2022, 3(4); doi: 10.38007/IJBMET.2022.030407.

Motivation and Impact of Shadow Banking of Non-financial Enterprises

Author(s)

Jingyi Zhang

Corresponding Author:
Jingyi Zhang
Affiliation(s)

Shanghai University, Shanghai 201800, China

Abstract

Corporate shadow banking is the act of non-financial enterprises using excess funds to engage in financial business (such as lending to enterprises with financing difficulties, earning financing differences, or purchasing financial products, etc.) to obtain additional economic benefits[1]. The results show that from the perspective of companies, the motives of shadow banking of non-financial enterprises mainly include corporate governance, speculative profit and risk prevention. On the one hand, in order to complete their management achievements, enterprise managers will choose short-term financial investment instead of long-term industrial investment, bringing about shadow banking of enterprises; On the one hand, enterprises choose to invest funds in the financial industry to improve the inefficiency of the real economy and obtain additional benefits; In addition, companies will also use shadow banking to enhance liquidity and avoid risks.

Keywords

Shadow Banking, Systemic Risk, Physical Investments, Corporate Finance

Cite This Paper

Jingyi Zhang. Motivation and Impact of Shadow Banking of Non-financial Enterprises. International Journal of Business Management and Economics and Trade (2022), Vol. 3, Issue 4: 56-63. https://doi.org/10.38007/IJBMET.2022.030407.

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