DETERMINANTS OF AGRICULTURE-RELATED LOAN DEFAULT: EVIDENCE FROM CHINA

  • Zhichao Yin Capital University of Economics and Business
  • Lei Meng East China University of Science and Technology
  • Yezhou Sha Capital University of Economics and Business
Keywords: Agriculture-related Loan, Default, Credit Risk, Monetary Policy, Collateral

Abstract

This paper investigates agriculture-related loan default in 2002–2009 through a large data set from a leading Chinese state-owned bank. Using logit regression, we find the default rate on agriculture-related loans is significantly higher than that on non–agriculture-related loans. We find that base interest rates, loan maturity, the type of collateral, firm size, ownership structure, and managerial quality rating have a significant impact on agriculture-related loan default, but this also depends on how agriculture-related loans are defined. The results provide insight into the real impact of monetary policy on agriculture-related lending.

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Published
2020-01-31
How to Cite
Yin, Z., Meng, L., & Sha, Y. (2020). DETERMINANTS OF AGRICULTURE-RELATED LOAN DEFAULT: EVIDENCE FROM CHINA. Buletin Ekonomi Moneter Dan Perbankan, 23, 129 - 150. https://doi.org/10.21098/bemp.v23i0.1160