This　study　uses　the　theory　of　real　options　to　investigate　how　the　withdrawal　of　implicit　government　guarantee　affects　the　shadow　banking　decisions　of　private　non-financial　firms.　This　empirical　research　uses　data　from　2015　to　2022.　The　results　show　that　such　withdrawals　reduce　shadow-banking　activities　among　private　enterprises;　this　includes　time　heterogeneity,　which　has　the　release　of　free　cash　flow　and　the　reduction　of　agency　cost　as　its　mechanism,　and　the　heterogeneity　of　corporate　governance　and　market　environment.　This　study　enriches　existing　research　on　corporate　shadow　banking　and　provides　policy　implications　for　the　regulation　thereof.　©　2025　City　University　of　Hong　Kong　and　National　Taiwan　University.