In China, loan guarantees play an important role in compensating for the deficiencies of the Chinese capital market. The provision of loan guarantees to third parties is a fundamental economic activity of listed Chinese companies. Many studies have examined the impact of guarantees on the value...

Listed companies in China have provided large numbers of loan guarantees for borrowers in recent years. The loan guarantee size of A-share Main Board listed companies was about RMB 3.85 trillion at the end of 2017. On the one hand, loan guarantees help borrowers access debt financing, which...