Abstract
We investigate the relationship between information disclosure and depositor behaviour in the Chinese banking sector. Specifically, we enquire whether enhanced information disclosure enables investors to more effectively infer a banking institution's risk profile, thereby influencing their deposit decisions. Utilising an unbalanced panel, incorporating financial data from 169 Chinese banks over the 1998–2009 period, we employ generalised-method-of-moments (GMM) estimation procedures to control for potential endogeneity, unobserved heterogeneity, and persistence in the dependent variable. We uncover evidence that: (i) the growth rate of deposits is sensitive to bank fundamentals after controlling for macroeconomic factors, diversity in ownership structure, and government intervention; (ii) a bank publicly disclosing more transparent information in its financial reports, is more likely to experience growth in its deposit base; and (iii) banks characterised by high information transparency, well-capitalised and adopted international accounting standards, are more able to attract funds by offering higher interest rates.
Original language | English |
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Pages (from-to) | 855-878 |
Number of pages | 24 |
Journal | Journal of International Financial Markets Institutions and Money |
Volume | 22 |
Issue number | 4 |
DOIs | |
Publication status | Published - Oct 2012 |
ASJC Scopus subject areas
- Economics and Econometrics
- Finance