Paper Title
The Impact of Board Structure on Loan Herding in Chinese Banks Considering the Mediating Effect of Underperformance

Abstract
Many studies investigate whether and how corporate governance of boards (i.e., board structure variables) affects bank performance. When poor governance practices exacerbate bank lending performance, banks are likely to exhibit“loan herding” to avoid a sustained deterioration in lending performance. Using the three main types of Chinese banks as our sample, this study first confirms the existence of loan herding and the positive impacts of weak board structure variables on poor bank lending performance. Then, after clarifying the positive effects of poor lending performance on loan herding, we examine whether board structure variables, measured by directors’ incentives and characteristics, negatively affect loan herding. The results show that when directors have higher compensation, moderate average age, and a higher level of education, bank loan herding is significantly reduced, whereas higher board duality and directors who are younger and very old significantly increase bank loan herding. Keywords - Board Structure, Chinese Banks, Corporate Governance, Herding Behavior, Lending. JEL: C21, D03, G02, G21, G30