Recently, a paper titled “The effects of reduced availability of shadow banking financing: Evidence from employment”, co-authored by Dr. ZENG Ceng from the Department of Accounting of the School and Dr. HE Siyi from Sichuan University, was published in Journal of Banking and Finance, a top-tier journal in the field of finance.
This paper empirically examines the impact of the declining availability of shadow banking financing on firms' employment decisions. Taking the introduction of China's shadow banking regulatory policies in 2017 as an exogenous shock, the study finds that after the implementation of the regulatory policies, the overall employment scale and the proportion of highly skilled employees of firms affected by the contraction of shadow banking financing have both decreased significantly. The underlying mechanisms mainly include the intensification of corporate financial constraints and the reduction in R&D investment. Moreover, the above impacts are more pronounced for non-state-owned enterprises, labor-intensive firms, and firms located in provinces with a higher dependence on shadow banking. In addition, the study also reveals that although the affected firms strategically respond by outsourcing human resources, the changes in their employment structure and scale still exert a negative impact on their financial performance and total factor productivity. This study thus indicates that regulatory measures on shadow banking implemented for financial institutions may have unintended negative consequences for non-financial firms.
Dr. ZENG Ceng graduated from Shanghai University of Finance and Economics and joined the School in 2024. He has long been engaged in research on accounting and finance issues under China's institutional context, and presides over research projects such as the Planning Project of Shanghai Philosophy and Social Sciences. He has published a number of papers as the first author or corresponding author in various authoritative domestic and international journals including Economic Research Journal, Accounting Research, Finance and Economics Research and Journal of Banking and Finance.
Paper information: Siyi HE, Ceng ZENG, The effects of reduced availability of shadow banking financing: Evidence from employment, Journal of Banking & Finance, Volume 183, 2026, 107618.