Does COVID-19 Affect Domestic Credit? Aggregate and Bank Level Evidence From China

We estimate the impact of COVID-19 on domestic credit in China over the period January 01, 2020 to June 30, 2020. Our findings show that an increase in COVID-19 confirmed cases/deaths significantly increases domestic credit in China, however; the magnitude of the impact is very small. The results from the impulse response analysis show that the response of domestic credit to COVID-19 shocks was positive in both the short- and long-run.