The Industry Expertise Channel of Mortgage Lending

Yongqiang Chu; Zhanbing Xiao; Yuxiang Zheng

doi:10.1017/S002210902510210X

The Industry Expertise Channel of Mortgage Lending

Yongqiang Chu, Zhanbing Xiao, Yuxiang Zheng^*

^*Corresponding author for this work

Research output: Journal Publications and Reviews › RGC 21 - Publication in refereed journal › peer-review

Abstract

We show that banks use industry knowledge acquired through corporate lending in mortgage lending, a phenomenon we refer to as the “industry expertise channel.” Specifically, we find that banks that specialize in particular industries increase their mortgage lending activity in regions where those industries are concentrated. The impact of industry expertise increases with information asymmetry and borrower risk. In addition, mortgages originated from this channel contain more soft information and perform better. The effect of the channel increases after unexpected industry distress and the 2008 financial crisis, suggesting that the effect is likely causal.
© The Author(s), 2025.

Original language	English
Number of pages	52
Journal	Journal of Financial and Quantitative Analysis
DOIs	https://doi.org/10.1017/S002210902510210X
Publication status	Accepted/In press/Filed - 2 Sept 2025

Research Keywords

Lending Specialization
Industry Expertise
Mortgage
Syndicated Loans

Access Output

10.1017/S002210902510210X

Permanent Link

Right click to copy link

Cite this

@article{42a297caabdc4474b3b889115257fa21,

title = "The Industry Expertise Channel of Mortgage Lending",

abstract = "We show that banks use industry knowledge acquired through corporate lending in mortgage lending, a phenomenon we refer to as the “industry expertise channel.” Specifically, we find that banks that specialize in particular industries increase their mortgage lending activity in regions where those industries are concentrated. The impact of industry expertise increases with information asymmetry and borrower risk. In addition, mortgages originated from this channel contain more soft information and perform better. The effect of the channel increases after unexpected industry distress and the 2008 financial crisis, suggesting that the effect is likely causal.{\textcopyright} The Author(s), 2025.",

keywords = "Lending Specialization, Industry Expertise, Mortgage, Syndicated Loans",

author = "Yongqiang Chu and Zhanbing Xiao and Yuxiang Zheng",

year = "2025",

month = sep,

day = "2",

doi = "10.1017/S002210902510210X",

language = "English",

journal = "Journal of Financial and Quantitative Analysis",

issn = "0022-1090",

publisher = "Cambridge University Press",

}

TY - JOUR

T1 - The Industry Expertise Channel of Mortgage Lending

AU - Chu, Yongqiang

AU - Xiao, Zhanbing

AU - Zheng, Yuxiang

PY - 2025/9/2

Y1 - 2025/9/2

N2 - We show that banks use industry knowledge acquired through corporate lending in mortgage lending, a phenomenon we refer to as the “industry expertise channel.” Specifically, we find that banks that specialize in particular industries increase their mortgage lending activity in regions where those industries are concentrated. The impact of industry expertise increases with information asymmetry and borrower risk. In addition, mortgages originated from this channel contain more soft information and perform better. The effect of the channel increases after unexpected industry distress and the 2008 financial crisis, suggesting that the effect is likely causal.© The Author(s), 2025.

AB - We show that banks use industry knowledge acquired through corporate lending in mortgage lending, a phenomenon we refer to as the “industry expertise channel.” Specifically, we find that banks that specialize in particular industries increase their mortgage lending activity in regions where those industries are concentrated. The impact of industry expertise increases with information asymmetry and borrower risk. In addition, mortgages originated from this channel contain more soft information and perform better. The effect of the channel increases after unexpected industry distress and the 2008 financial crisis, suggesting that the effect is likely causal.© The Author(s), 2025.

KW - Lending Specialization

KW - Industry Expertise

KW - Mortgage

KW - Syndicated Loans

U2 - 10.1017/S002210902510210X

DO - 10.1017/S002210902510210X

M3 - RGC 21 - Publication in refereed journal

SN - 0022-1090

JO - Journal of Financial and Quantitative Analysis

JF - Journal of Financial and Quantitative Analysis

ER -

The Industry Expertise Channel of Mortgage Lending

Abstract

Research Keywords

Access Output

Permanent Link

Fingerprint

Cite this