Financial structure and systemic risk of banks: Evidence from Chinese reform

Guseon Ji, Daniel Sungyeon Kim, Kwangwon Ahn

Research output: Contribution to journalArticlepeer-review

11 Citations (Scopus)


Using Chinese data from 2006 to 2014, we find that a shift in the financial structure towards a more market-based structure can reduce the systemic risk of the banking sector. One transmission channel through which this occurs is the improvement in an individual firm's debt repaying capacity, which is positively influenced by the development of stock markets. Another channel is the enhanced credit monitoring of borrowers by banks, owing to their slower credit growth. Our results imply that the shift toward market-based financial structure could lead to the development of financial market as well as the enhancement of the stability of an economy.

Original languageEnglish
Article number3721
JournalSustainability (Switzerland)
Issue number13
Publication statusPublished - 2019 Jul 1

Bibliographical note

Funding Information:
Funding: This research was supported by the research expenses for settlement of newly hired faculties at KAIST (G0416004; K.A.).

Publisher Copyright:
© 2019 by the authors.

All Science Journal Classification (ASJC) codes

  • Geography, Planning and Development
  • Renewable Energy, Sustainability and the Environment
  • Environmental Science (miscellaneous)
  • Energy Engineering and Power Technology
  • Management, Monitoring, Policy and Law


Dive into the research topics of 'Financial structure and systemic risk of banks: Evidence from Chinese reform'. Together they form a unique fingerprint.

Cite this