A Tale of Two Markets: Labor Market Mobility and Bank Information Sharing

34 Pages Posted: 25 Oct 2021 Last revised: 27 Oct 2021

See all articles by Yinxiao Chu

Yinxiao Chu

University of International Business and Economics (UIBE) - School of Banking and Finance

Zhao Li

University of International Business and Economics (UIBE) - School of Banking and Finance

Jianxing Wei

University of International Business and Economics (UIBE) - School of Banking and Finance

Weixing Wu

University of International Business and Economics (UIBE)

Date Written: October 21, 2021

Abstract

We develop a theory of bank information sharing, highlighting the interactions between credit and labor markets. A better-informed relationship bank competes with a less informed foreign bank for borrowers under asymmetric information about borrowers' creditworthiness. Credit market competition triggers competition for the relationship bank's loan officers, who possess valuable information about the borrowers' creditworthiness. The relationship bank can share credit information to soften the labor market competition, despite intensifying the credit market competition. When labor market mobility is moderate, information sharing emerges as the optimal strategy of the relationship bank.

Keywords: Credit market, Loan officer, Labor mobility, Information sharing

JEL Classification: D82, G21, L13

Suggested Citation

Chu, Yinxiao and Li, Zhao and Wei, Jianxing and Wu, Weixing, A Tale of Two Markets: Labor Market Mobility and Bank Information Sharing (October 21, 2021). Available at SSRN: https://ssrn.com/abstract=3946967 or http://dx.doi.org/10.2139/ssrn.3946967

Yinxiao Chu

University of International Business and Economics (UIBE) - School of Banking and Finance ( email )

No.10, Huixindong Street
Chaoyang District
Beijing, 100029
China

Zhao Li

University of International Business and Economics (UIBE) - School of Banking and Finance ( email )

No.10, Huixindong Street
Chaoyang District
Beijing, 100029
China

Jianxing Wei

University of International Business and Economics (UIBE) - School of Banking and Finance ( email )

No.10, Huixindong Street
Chaoyang District
Beijing, 100029
China

Weixing Wu (Contact Author)

University of International Business and Economics (UIBE) ( email )

10, Huixin Dongjie
Changyang District
Beijing, Beijing 100029
China

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
25
Abstract Views
128
PlumX Metrics