• Corpus ID: 2457410

Firms as Surrogate Intermediaries: Evidence from Emerging Economies

@inproceedings{Shin2014FirmsAS,
  title={Firms as Surrogate Intermediaries: Evidence from Emerging Economies},
  author={Hyun Song Shin and Laura Yi Zhao},
  year={2014}
}
A firm can finance investment either by borrowing or by drawing on cash balances, so that financial asset and liability changes tend to have opposite signs. In contrast, financial intermediaries borrow in order to lend, so that financial asset and liability changes have the same sign. Large non-financial firms in China and India behave like intermediaries rather than textbook non-financial firms. We explore the role of nonfinancial firms in the shadow banking system. The evidence from China and… 
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