Recently, the collaborative paper Can Asset-backed Securitization Improve Corporate Value? Evidence from China by Professor Li Jianbiao from the School of Economics and the Center for Neuroeconomics has been officially published in Journal of Corporate Finance, an internationally authoritative journal.
Adopting a look-through approach, the research team identifies the actual originators of China’s corporate asset-backed securitization (ABS) transactions from 2013 to 2024. It investigates the relationship between corporate ABS and firm performance, and provides evidence supporting the shadow-leverage interpretation for such relationship. The main findings are as follows. First, there exists an inverted U-shaped relationship between corporate ABS and firm performance. At low-to-moderate issuance levels, corporate ABS is positively correlated with firm performance; yet the correlation turns negative when ABS issuance becomes excessive. This finding remains robust after applying alternative proxies for corporate ABS and firm performance, introducing control variables, employing propensity-score matching, and conducting other robustness tests. Second, the relationship between corporate ABS and firm performance differs across ownership structures and firm sizes. The inverted U-shaped pattern is more pronounced among non-state-owned enterprises and large-sized firms: the correlation is strongly positive at moderate securitization levels, but turns strongly negative when firms become overly reliant on ABS. Third, mechanism analysis yields evidence consistent with the shadow-leverage interpretation. Multi-faceted evidence suggests that corporate ABS in China bears debt-like features, matching the properties of shadow leverage. Further leverage-channel analysis corroborates that leverage helps explain the nonlinear relationship between corporate ABS issuance and firm performance.
The paper’s co-authors are Associate Professor Pang Ronghui from Shanghai Publishing and Printing College, Lecturer Zhang Yanan from Shandong Normal University, and PhD candidate Xie Shaopeng from Shanghai Maritime University.
Li Jianbiao is Professor, Doctoral Supervisor, and Distinguished Professor at Shandong University. He serves as Director of the Center for Neuroeconomics, Shandong University. His research interests cover neuroeconomics/neurofinance, behavioral and experimental economics, as well as behavioral and neuro corporate governance. As first or corresponding author, his research outputs have been published in top tier international journals including Management Science, Experimental Economics, Journal of Economic Behavior & Organization, Proceedings of the National Academy of Sciences, and NeuroImage. He presides over a Major Project and a Key Project of the National Social Science Fund of China, together with four General Programs of the National Natural Science Foundation of China.
Paper link: https://authors.elsevier.com/c/1nbwT3JGUN99wQ
