This paper takes the issuance scale of negotiable certificates of deposit (NCDs) as the explanatory variable and introduces macro-level control variables—including FDR007, the year-on-year growth rate of M2, and the 10-year government bond yield—while employing a bank fixed effects model for the empirical analysis. The results show that, after controlling for the macro interest rate environment, there is a significant positive relationship between NCD issuance scale and financing cost: as the issuance scale expands, financing cost rises accordingly. Notably, a simple correlation analysis reveals a weak negative correlation between the two; however, this is largely driven by the macro interest rate environment. During the sample period the overall monetary environment was relatively accommodative, and low interest rates were often accompanied by larger issuance scales, which produced an apparent negative correlation. Only after the relevant macro control variables are included does the impact of issuance scale on financing cost become clearly evident. Although the economic magnitude of this effect is limited—markedly smaller than that of interbank funding rates and the long-term government bond yield—its direction is clear and statistically significant. The macro liquidity environment thus remains a major determinant of NCD pricing, whereas issuance scale reflects the bank's own marginal effect. The robustness test results are broadly consistent with the baseline regression, indicating that the conclusions of this paper are reasonably reliable.

Enze Zhang, Junping Chen. Negotiable Certificate of Deposit Issuance Scale and Financing Costs of China’s Large State-Owned Commercial Banks. Academic Journal of Business & Management (2026), Vol. 8, Issue 10: 48-56. https://doi.org/10.25236/AJBM.2026.081007.

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