Deposit-Lending Synergies: Evidence from Chinese Students at US Universities

Journal of Financial and Quantitative Analysis

52 Pages Posted: 21 Nov 2017 Last revised: 29 Dec 2020

See all articles by Jun Yang

Jun Yang

University of Notre Dame

Date Written: December 27, 2020

Abstract

This paper exploits an influx of Chinese students to US universities from 2000 through 2018 to study synergies between banks' deposit-taking and lending activities. Banks that are more recognizable by Chinese students experience higher deposit inflows and increase their local credit supply. This credit supply expansion only occurs in information sensitive credit markets: small business loans and second lien mortgages. Such increase concentrates in non-tradable sectors and is more pronounced at locations where managers have more autonomy. The results indicate that deposits from local consumers convey private information about the local credit market, which helps banks in information-sensitive lending.

Keywords: Banking, Information Synergies, Small Business Lending, Mortgages, Chinese International Students

JEL Classification: G21

Suggested Citation

Yang, Jun, Deposit-Lending Synergies: Evidence from Chinese Students at US Universities (December 27, 2020). Journal of Financial and Quantitative Analysis, Available at SSRN: https://ssrn.com/abstract=3073218 or http://dx.doi.org/10.2139/ssrn.3073218

Jun Yang (Contact Author)

University of Notre Dame ( email )

Notre Dame, IN
United States

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