Anti-corruption intensity and loan contracting: Evidence from non-state owned firms in China

Guangzi Li and Kam C. Chan

Emerging Markets Review, 2021, vol. 49, issue C

Abstract: We examine the effect of China’ s anti-corruption intensity on loan contracting efficiency. The findings suggest that conditional on the political connection (total factor productivity) of a firm, the anti-corruption intensity in the province in which a firm is located leads to less (more) favorable loan contracting terms. Additional analysis shows that the effect of anti-corruption intensity on loan contracting terms is stronger for firms with higher financing constraints and weaker external legal environments. We further find that higher anti-corruption intensity is related to lower credit growth at the macro level.

Keywords: Anti-corruption intensity; Loan contract; Political connection; Total factor productivity; Corporate governance (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ememar:v:49:y:2021:i:c:s1566014121000261

DOI: 10.1016/j.ememar.2021.100818

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